II - 7
As filed with the Securities and Exchange Commission on November
17, 1997
Registration Statement No. 33-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________________
CRESTAR FINANCIAL CORPORATION
(Exact name of Registrant as specified in its Charter)
Virginia 54-0722175
(State or other jurisdiction of(I.R.S. Employer Identification Number)
incorporation or organization)
919 East Main Street
Richmond, Virginia 23219
804-782-5000
(Address of principal executive office, including zip code)
AMERICAN NATIONAL SAVINGS BANK, F.S.B.
401(k) PLAN
(Full title of the Plan)
____________________
Linda F. Rigsby, Esq.
Senior Vice President and Corporate Secretary
Crestar Financial Corporation
919 East Main Street
Richmond, Virginia 23219
804-782-7738
(Name, address and telephone number including, area code, of
agent for service)
With copies to:
Lathan M. Ewers, Jr.
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
804-788-8269
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Amount to maximum maximum Amount of
securities be offering aggregate registration
to be registered registered price offering fee
per price(2)
share(2)
25,000(1) $48.125 $1,203,125 $365
Common Stock, $5
par value
Preferred Share
Purchase
Rights(2)
(1) Estimated solely for the purpose of computing the
registration fee. This amount was calculated pursuant to
Rule 457(c) on the basis of $48.125 per share, which was the
average of the high and low prices of the Common Stock as
reported on the New York Stock Exchange on November 12, 1997. In
addition, pursuant to Rule 416(c) under the Securities Act, this
Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit
plan described herein.
(2) The Rights to purchase Participating Cumulative
Preferred Stock, Series C will be attached to and will trade with
shares of the Common Stock of the Company.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Not required to be filed with the Securities and Exchange
Commission (the "Commission").
Item 2. Registrant Information and Employee Plan Annual
Information.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Crestar Financial
Corporation (the "Company") with the Commission (file No. 1-7083)
are incorporated herein by reference and made a part hereof: (i)
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996; (ii) the Company's Quarterly Reports on
Form 10-Q for the quarters ended March 31, June 30, and September
30, 1997; and (iii) the description of the Company's Common Stock
(the "Common Stock") contained in the Company's registration
statement on Form 8-A filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment or
report filed for the purpose of updating such description.
All annual reports of the American National Savings Bank,
F.S.B. 401(k) Plan (the "Plan") pursuant to Section 13(a) or
15(d) of the Exchange Act, and all documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of the Prospectus and prior to the filing of a
post-effective amendment that indicates that all securities
offered have been sold or that deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference
in the Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of the Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document that is incorporated by reference herein modifies or
supersedes such earlier statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Prospectus.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Directors and officers of the Company may be indemnified
against liabilities, fines, penalties, and claims imposed upon or
asserted against them as provided in the Virginia Stock
Corporation Act and the Company's Restated Articles of
Incorporation. Such indemnification covers all costs and
expenses reasonably incurred by a director or officer. The Board
of Directors, by a majority vote of a quorum of disinterested
directors or, under certain circumstances, independent counsel
appointed by the Board of Directors, must determine that the
director or officer seeking indemnification was not guilty of
willful misconduct or a knowing violation of the criminal law.
In addition, the Virginia Stock Corporation Act and the Company's
Restated Articles of Incorporation may under certain
circumstances eliminate the liability of directors and officers
in a shareholder or derivative proceeding.
If the person involved is not a director or officer of the
Company, the Board of Directors may cause the Company to
indemnify to the same extent allowed for directors and officers
of the Company such person who was or is a party to a proceeding,
by reason of the fact that he is or was an employee or agent of
the Company, or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise.
The Company has in force and effect a policy insuring the
directors and officers of the Company against losses which they
or any of them shall become legally obligated to pay for reason
of any actual or alleged error or misstatement or misleading
statement or act or omission or neglect or breach of duty by the
directors and officers in the discharge of their duties,
individually or collectively, or any matter claimed against them
solely by reason of their being directors or officers, such
coverage being limited by the specific terms and provisions of
the insurance policy.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No.
4.1 Amended and Restated Articles of Incorporation of the
Company (Incorporated herein by reference from Exhibit
3(a) of the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 (Commission File No. 1-
7083)).
4.2 Bylaws of the Company (Incorporated herein by reference
from Exhibit 3(b) of the Company's Annual Report on
Form 10-K for the year ended December 31, 1996).
4.3 Rights Agreement dated June 23, 1989, between the
Company and Mellon Bank, N.A., as Rights Agent
(Incorporated herein by reference from Exhibit 4.1 of
the Company's Current Report on Form 8-K dated June 23,
1989).
4.4 American National Savings Bank, F.S.B. 401(k) Plan.
5 Opinion of Hunton & Williams as to the legality of the
securities being registered.
23.1 Consent of Hunton & Williams (included in the opinion
filed as Exhibit 5 to the Registration Statement).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Deloitte & Touche LLP.
24 Power of Attorney for Officers and Directors (included on
signature page).
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or
sales are made, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change in such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
2. That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described under Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Richmond, Commonwealth of Virginia, on this 12th day of
November, 1997.
CRESTAR FINANCIAL CORPORATION
(Registrant)
By /s/ Richard G. Tilghman
Richard G. Tilghman,
Chairman,
Chief Executive Officer
and Director
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities indicated on November 12, 1997. Each
of the directors and/or officers of Crestar Financial Corporation
whose signature appears below hereby appoints John C. Clark, III,
Lathan M. Ewers, Jr. and David M. Carter, and each of them
severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below, and to file with
the Commission any and all amendments, including post-effective
amendments, to this registration statement, making such changes
in the registration statement as appropriate, and generally to do
all such things in their behalf in their capacities as officers
and directors to enable Crestar Financial Corporation to comply
with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.
Signature Title
By /s/ Richard G. Tilghman Chairman, Chief Executive
Richard G. Tilghman Officer and Director
(Principal Executive Officer)
By /s/ James M. Wells, III President, Chief Operating
James M. Wells, III Officer and Director
By /s/ Richard F. Katchuk Corporate Executive Vice
Richard F. Katchuk President and Chief Financial
Officer
(Principal Financial Officer)
By /s/ James D. Barr Group Executive Vice
James D. Barr President, Controller and
Treasurer
(Principal Accounting Officer)
By /s/ J. Carter Fox Director
J. Carter Fox
By /s/ Bonnie Guiton Hill Director
Bonnie Guiton Hill
By /s/ Charles R. Director
Longsworth
Charles R. Longsworth
By /s/ Patrick J. Maher Director
Patrick J. Maher
By /s/ Frank E. McCarthy Director
Frank E. McCarthy
By /s/ Paul D. Miller Director
Paul D. Miller
By /s/ G. Gilmer Minor, Director
III
G. Gilmer Minor, III
By /s/ Gordon F. Rainey, Director
Jr.
Gordon F. Rainey, Jr.
By /s/ Frank S. Royal, M.D. Director
Frank S. Royal, M.D.
By /s/ Alfred H. Smith Director
Alfred H. Smith, Jr.
By /s/ Jeffrey R. Springer Director
Jeffrey R. Springer
By /s/ Eugene P. Trani Director
Eugene P. Trani
By Director
______________________________
_________
L. Dudley Walker
By /s/ Robert C. Wilburn Director
Robert C. Wilburn
By /s/ Karen Hastie Director
Williams
Karen Hastie Williams
The Plan. Pursuant to the requirements of the Securities Act,
the Plan has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized, in
Richmond, Virginia on this 12th day of November, 1997.
AMERICAN NATIONAL SAVINGS BANK,
F.S.B.
401(k) PLAN
By /s/ James J. Kelley
James J. Kelley
Group Executive Vice President
Compensation & Benefits
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
EXHIBITS
filed with
REGISTRATION STATEMENT
on
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
____________________
AMERICAN NATIONAL SAVINGS BANK, F.S.B.
401(k) PLAN
(full title of the plan)
EXHIBIT INDEX
Sequentially
Exhibit No. Description Number Page
4.1 Amended and Restated
Articles of Incorporation
of the Company
(Incorporated herein by
reference from Exhibit
3(a) of the Company's
Annual Report on Form 10-
K for the year ended
December 31, 1996
(Commission File No. 1-
7083)).
4.2 Bylaws of the Company
(Incorporated herein by
reference from Exhibit
3(b) of the Company's
Annual Report on Form 10-
K for the year ended
December 31, 1996).
4.3 Rights Agreement dated
June 23, 1989, between
the Company and Mellon
Bank, N.A., as Rights
Agent (Incorporated
herein by reference from
Exhibit 4.1 of the
Company's Current Report
on Form 8-K dated June
23, 1989).
4.4 American National Savings
Bank, F.S.B. 401(k) Plan.
5 Opinion of Hunton &
Williams as to the
legality of the
securities being
registered.
23.1 Consent of Hunton &
Williams (included in the
opinion filed as Exhibit
5 to the Registration
Statement).
23.2 Consent of KPMG Peat
Marwick LLP.
23.3 Consent of Deloitte &
Touche LLP.
24 Power of Attorney for
Officers and Directors
(included on signature
page).
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Exhibit 23.2
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
Crestar Financial Corporation:
We consent to the use of our report included in Crestar Financial
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996 incorporated herein by reference. Our report
refers to our reliance on another auditors' report with respect
to amounts related to Citizens Bancorp included in the
aforementioned consolidated financial statements.
/s/ KPMG Peat Marwick LLP
Richmond, Virginia
November 14, 1997
Exhibit 4.4
AMERICAN NATIONAL SAVINGS BANK, F.S.B.
401 (K) PLAN
ADOPTION AGREEMENT
Amended and Restated
January 1, 1997
ADOPTION AGREEMENT FOR
RETIREMENT PLAN ADMINISTRATIVE SERVICE, LTD.
NON-STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
The undersigned Employer adopts the RETIREMENT PLAN
ADMINISTRATIVE SERVICE, LTD. Non-Standardized 401(k) Profit
Sharing Plan and Trust for those Employees who shall qualify as
Participants hereunder, to be known as the
A1 American National Savings Bank, F.S.B. 401(k)
Plan_____________________________
(Enter Plan Name)
It shall be effective as of the date specified below. The
Employer hereby selects the following Plan specifications:
CAUTION: The failure to properly fill out this Adoption
Agreement may result in disqualification of the Plan.
EMPLOYER INFORMATION
BI Name of Employer American National Savings Bank,
F.S.B._____________________
B2 Address 211 North Liberty
Street______________________________________________
Baltimore, MD
21201_________________________
City State
Zip___________________________________
Telephone (401) 625-8655___________
B3 Employer Identification Number 52-0222930______________
B4 Date Business Commenced _______________________________
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. ( ) Corporation
d. ( ) Sole Proprietorship
e. ( ) Partnership
f. (X) Other Federally Chartered Savings Bank_______
AND, is the Employer a member of.
g. a controlled group? (X) Yes ( ) No
h. an affiliated service group? ( ) Yes (X) No
Copyright 1991-R RETIREMENT PLAN ADMINISTRATIVE SERVICE,
LTD.
B6 NAME(S) OF TRUSTEE(S)
a. Mercantile-Safe Deposit and Trust Co. Trust Division-
Employee Benefits Unit________
b.
_________________________________________________________________
_______
c.
_________________________________________________________________
_______
d.
_________________________________________________________________
_______
e.
_________________________________________________________________
_______
B7 TRUSTEES' ADDRESS
a. ( ) Use Employer Address
b. (X) 2 Hopkins
Plaza____________________________________________________
Street
Baltimore , Maryland
21201
City State
Zip
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a. (X) State b. ( ) Commonwealth of c. Maryland and
this Plan and Trust shall be governed under the same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on a. August 1st (e.g., January 1st) and
month day
ending on b. July 31st____
month day
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the RETIREMENT PLAN
ADMINISTRATIVE SERVICE, LTD.
Non-Standardized 401(k) Profit Sharing Plan and Trust shall:
a. ( ) establish a new Plan and Trust effective as of ___
(hereinafter called the "Effective Date").
b. (X) constitute an amendment and restatement in its
entirety of a previously established qualified Plan and
Trust of the Employer which was effective January 1,
1995 (hereinafter called the "Effective Date"). Except
as specifically provided in the Plan, the effective
date of this amendment and restatement is January 1,
1997 (For TRA '86 amendments, enter the first day of
the first Plan Year beginning in 1989).
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st)
and ending on b. December 31st
IS THERE A SHORT PLAN YEAR?
c. (X) No
d. ( ) Yes, beginning ____________________
and ending _______________________
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. December 31st
month day
C4 PLAN NUMBER assigned by the Employer (select one)
a. ( ) 001 b. (X) 002 c. ( ) 003 d. ( ) Other
___________
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the
Employer to appoint an Administrator. If none is named, the
Employer will become the Administrator.)
a. (X) Employer (Use Employer Address)
b. ( ) Name
____________________________________________________________
Address ( ) Use Employer Address
__________________________________________________________
_____________________ , ______________________
_____________
City State Zip
Telephone ________________________________________
Administrator's I.D. Number __________________________
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. (X) Employer (Use Employer Address)
b. ( ) Name
____________________________________________________________
Address
_________________________________________________________
_________________________________________________________
ELIGIBILITY, VESTING AND RETIREMENT AGE
DI ELIGIBLE EMPLOYEES (Plan Section 1.15) shall mean:
a. ( ) all Employees who have satisfied the eligibility
requirements.
b. (X) all Employees who have satisfied the eligibility
requirements except those checked below:
1. ( ) Employees paid by commissions only.
2. ( ) Employees hourly paid.
3. ( ) Employees paid by salary.
4. ( ) Employees whose employment is governed by a
collective bargaining agreement
between the employer and "employee
representatives" under which retirement benefits
were the subject of good faith bargaining. For
this purpose, the term "employee representatives"
does not include any organization more than half
of whose members are employees who are owners,
officers, or executives of the Employer.
5. ( ) Highly Compensated Employees.
6. ( ) Employees who are non-resident aliens who
received no earned income (within the
meaning of Code Section 91 l(d)(2)) from the
Employer which constitutes income from sources
within the United States (within the meaning of
Code Section 861(a)(3)).
7. (X) Other: Leased Employees; Employees of
Crestar Bank and Crestar Affiliates on or after
November 13, 1997.
NOTE: For purposes of this section, the term Employee
shall include all Employees of this Employer and any
leased employees deemed to be Employees under Code
Section 414(n) or 414(o).
D2 EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.16)
Employees of Affiliated Employers:
a. ( ) will not or N/A
b. (X) will
be treated as Employees of the Employer adopting the Plan.
NOTE: If D2b is elected, each Affiliated Employer should
execute this Adoption Agreement as a Participating
Employer.
D3 HOURS OF SERVICE (Plan Section 1.31) will be determined on
the basis of the method selected below. Only one method may
be selected. The method selected will be applied to all
Employees covered under the Plan.
a. (X) On the basis of actual hours for which an Employee
is paid or entitled to payment.
b. ( ) On the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if
under the Plan such Employee would be credited with at
least one (1) Hour of Service during
the day.
c. ( ) On the basis of weeks worked. An Employee will be
credited forty-five (45) Hours of Service if under the
Plan such Employee would be credited with at least one
(1) Hour of Service during the week.
d. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95) Hours
of Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the semi-monthly payroll period.
e. ( ) On the basis of months worked. An Employee will
be credited with one hundred ninety (190) Hours of
Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the month.
D4 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
(Check either a OR b and c, and if applicable, d)
Any Eligible Employee will be eligible to participate in the
Plan if such Eligible Employee has
satisfied the service and age requirements, if any,
specified below:
a. ( ) NO AGE OR SERVICE REQUIRED.
b. (X) SERVICE REQUIREMENT (may not exceed 1 year)
1. ( ) None
2. ( ) 1/2 Year of Service
3. (X) 1 Year of Service
4. ( ) Other 19
NOTE: If the Year(s) of Service selected is or includes
a fractional year, an Employee will not be required to
complete any specified number of Hours of Service to
receive credit for such fractional year. If expressed
in Months of Service, an Employee will not be required
to complete any specified number of Hours of Service in
a particular month.
c. (X) AGE REQUIREMENT (may not exceed 21)
1. ( ) N/A - No Age Requirement.
2. ( ) 201/2
3. ( ) 21
4. (X) Other 19
d. ( ) FOR NEW PLANS ONLY - Regardless of any of the
above age or service requirements, any Eligible
Employee who was employed on the Effective Date of the
Plan shall be eligible to participate hereunder and
shall enter the Plan as of such date.
D5 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the
requirements.
b. ( ) the first day of the Plan Year in which he met the
requirements, if he met the requirements in the first 6
months of the Plan Year, or as of the first day of the
next succeeding Plan Year if he met the requirements in
the last 6 months of the Plan Year.
c. ( ) the earlier of the first day of the seventh month
or the first day of the Plan Year coinciding with or
next following the date on which he met the
requirements.
d. ( ) the first day of the Plan Year next following the
date on which he met the requirements.
(Eligibility must be 1/2 Year of Service or less and
age 20 I/2 or less.)
e. ( ) the first day of the month coinciding with or next
following the date on which he met the requirements.
f. (X) Other: First day of the calendar quarter
coinciding with or next following the date on which he
met the requirements, provided that an Employee who has
satisfied the maximum age and service requirements that
are permissible in Section D4 above and who is
otherwise entitled to participate, shall commence
participation no later than the earlier of (a) 6 months
after such requirements are satisfied, or (b) the first
day of the first Plan Year after such requirements are
satisfied, unless the Employee separates from service
before such participation date.
D6 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service,
shall be as follows:
a. ( ) 100% upon entering Plan. (Required if eligibility
requirement is greater than one (1) Year of Service.)
b. ( ) 0-2 years 0% c. (X)0-4 years 0%
3 years 100% 5 years 100%
d. ( ) 0-1 year 0% e. ( ) l year
25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80% 6 years 100%
f. ( ) l year 20% g. ( ) 0-2 years
0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
h. ( ) Other - Must be at least as liberal as either c or
g above.
Years of Service Percentage
______________ _________
______________ _________
______________ _________
______________ _________
______________ _________
______________ _________
______________ _________
D7 FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting
schedule has been amended to a less favorable schedule,
enter the pre-amended schedule below:
a. (X) Vesting schedule has not been amended or amended
schedule is more favorable in all years.
b. ( ) Years of Service Percentage
______________ _________
______________ _________
______________ _________
______________ _________
______________ _________
______________ _________
______________ _________
D8 TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan
becomes a Top Heavy Plan, the following vesting schedule,
based on number of Years of Service, for such Plan Year and
each succeeding Plan Year, whether or not the Plan is a Top
Heavy Plan, shall apply and shall be treated as a Plan
amendment pursuant to this Plan. Once effective, this
schedule shall also apply to any contributions made prior to
the effective date of Code Section 416 and/or before the
Plan became a Top Heavy Plan.
a. ( ) N/A (D6a, b, d, e or f was selected)
b. (X) 0-1 year 0% c. ( ) 0-2 years 0%
2 years 20% 3 years 100%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account
balances of any Participant who does not have an Hour
of Service after the Plan has initially become top
heavy. Such Participant's Account balance attributable
to Employer contributions and Forfeitures will be
determined without regard to this section.
D9 VESTING (Plan Section 6.4(h)) In determining Years of
Service for vesting purposes, Years of Service attributable
to the following shall be EXCLUDED:
a. ( ) Service prior to the Effective Date of the Plan or
a predecessor plan. b. (X) N/A.
c. ( ) Service prior to the time an Employee attained age
18 . d. (X) N/A.
DI0 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
a. (X) No.
b. ( ) Yes: Years of Service with ____ shall be
recognized for the purpose of this Plan.
NOTE: If the predecessor Employer maintained this
qualified Plan, then Years of Service with such
predecessor Employer shall be recognized pursuant to
Section 1.74, and b. must be marked.
D11 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.42) means:
a. ( ) the date a Participant attains his _____ birthday.
(not to exceed 65th)
b. (X) the later of the date a Participant attains his
65th birthday (not to exceed 65th) or the c. 5th (not
to exceed 5th) anniversary of the first day of the Plan
Year in which participation in the Plan commenced.
D12 NORMAL RETIREMENT DATE (Plan Section 1.43) shall commence:
a. ( ) As of the Participant's "NRA."
OR (must select b. or c. AND 1. or 2.)
b. (X) as of the first day of the month...
c. ( ) as of the Anniversary Date...
1. (X) coinciding with or next following the
Participant's "NRA."
2. ( ) nearest the Participant's "NRA."
D13 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. (X) No Early Retirement provision provided.
b. ( ) date on which a Participant...
c. ( ) first day of the month coinciding with or next
following the date on which a Participant...
d. ( ) Anniversary Date coinciding with or next following
the date on which a Participant...
AND, if b, c or d was selected...
1. ( ) attains his ____ birthday and has
2. ( ) completed at least ____ Years of Service.
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION (Plan Section 1.9) with respect to any
Participant means:
1. (X) Wages, tips and other Compensation on Form W-
2.
2. ( ) Section 3401(a) wages (wages for withholding
purposes).
3. ( ) 415 safe-harbor compensation.
AND COMPENSATION
1. ( ) shall
2. (X) shall not
exclude (even if includible in gross income)
reimbursements or other expense allowances, fringe
benefits (cash or noncash), moving expenses, deferred
compensation, and welfare benefits.
b. COMPENSATION shall be
1. (X) actually paid (must be selected if Plan is
integrated)
2. ( ) accrued
c. HOWEVER, for non-integrated plans, Compensation shall
exclude (select all that apply):
1. (X) N/A. No exclusions
2. ( ) overtime
3. ( ) bonuses
4. ( ) commissions
5. ( ) other _____
d. FOR PURPOSES OF THIS SECTION El, Compensation shall be
based on:
1. (X) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending
within the Plan Year.
3. ( ) the Calendar Year coinciding with or ending
within the Plan Year.
NOTE: The Limitation Year shall be the same as the year on
which Compensation is based.
e. HOWEVER, for an Employee's first year of participation,
Compensation shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. (X) the date the Participant entered the Plan.
f. IN ADDITION, COMPENSATION and "414(s) Compensation" 1.
(X) shall 2. ( ) shall not include compensation
which is not currently includible in the Participant's
gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(l)(B) or 403(b).
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION
(Plan Section 11.2) Each Employee may elect to have his
Compensation reduced by:
a. ( ) ___%
b. (X) up to 20 %
c. ( ) from ___% to ___%
d. ( ) up to the maximum percentage allowable not to
exceed the limits of Code Sections 401(k),
404 and 415.
AND.
e. (X) A Participant may elect to commence salary
reductions as of the first day of any calendar quarter
(ENTER AT LEAST ONE DATE OR PERIOD). A Participant may
modify the amount of salary reductions as of the first
day of any calendar quarter (ENTER AT LEAST ONE DATE OR
PERIOD).
AND.
Shall cash bonuses paid within 2 1/2 months after the end of
the Plan Year be subject to the salary reduction election?
f. ( ) Yes
g. (X) No
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION
(Plan Section 11.1(b))
a. (X) N/A. There shall be no matching contributions.
b. ( ) The Employer shall make matching contributions
equal to ___ % (e.g. 50%) of the
Participant's salary reductions.
c. ( ) The Employer may make matching contributions equal
to a discretionary percentage, to be
determined by the Employer, of the Participant's salary
reductions.
d. ( ) The Employer shall make matching contributions
equal to the sum of ___ % of the portion of
the Participant's salary reduction which does not
exceed ___ % of the Participant's
Compensation plus ___ % of the portion of the
Participant's salary reduction which exceeds
___% of the Participant's Compensation, but does not
exceed ___ % of the Participant's Compensation.
e. ( ) The Employer shall make matching contributions
equal to the percentage determined under
the following schedule:
Participant's Total Matching Percentage
Years of Service
____ ____
____ ____
____ ____
FOR PLANS WITH MATCHING CONTRIBUTIONS
f. ( ) Matching contributions g. ( ) shall h.
( ) shall not be used in satisfying the deferral
percentage tests. (If used, full vesting and
restrictions on withdrawals will apply and the match
will be deemed to be an Elective Contribution).
i. ( ) Shall a Year of Service be required in order to
share in the matching contributions?
With respect to Plan Years beginning after 1989...
1. ( ) Yes (Could cause Plan to violate minimum
participation and coverage requirements
under Code Sections 401 (a)(26) and 410)
2. ( ) No
With respect to Plan Years beginning before 1990...
1. ( ) N/A, new Plan, or same as years beginning
after 1989.
2. ( ) Yes
3. ( ) No
j.( ) In determining matching contributions, only salary
reductions up to % of a Participant's
Compensation will be matched. k. ( ) N/A
1.( ) The matching contribution made on behalf of a
Participant for any Plan Year shall not exceed
$____. m.( )N/A
n.( ) Matching contributions shall be made on behalf of
1. ( ) all Participants.
2. ( ) only Non-Highly Compensated Employees.
o. ( ) Notwithstanding anything in the Plan to the
contrary, all matching contributions which relate
to distributions of Excess Deferred Compensation,
Excess Contributions, and Excess
Aggregate Contributions shall be Forfeited. (Select
this option only if it is applicable.)
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED
(OTHER THAN A DISCRETIONARY MATCHING OR QUALIFIED NON-
ELECTIVE CONTRIBUTION) (Plan Section 11.1 (c))?
a. (X) No.
b. ( ) Yes, the Employer may make a discretionary
contribution out of its current or accumulated Net
Profit.
c. ( ) Yes, the Employer may make a discretionary
contribution which is not limited to its current or
accumulated Net Profit.
IF YES (b. or c. is selected above), the Employer's
discretionary contribution shall be allocated as
follows:
d. ( ) FOR A NON-INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year
shall be allocated in the same ratio as each
Participant's Compensation bears to the total of such
Compensation of all Participants.
e. ( ) FOR AN INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year
shall be allocated in accordance with Plan
Section 4.3(b)(2) based on a Participant's Compensation in
excess of:
f. ( ) The Taxable Wage Base.
' g. ( ) The greater of $10,000 or 20% of the Taxable Wage
Base.
h. ( ) ___% of the Taxable Wage Base. (See Note below)
i. ( ) $____. (see Note below)
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if h. or i. above is more than 20% and less than
or equal to 80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more than
80% of the Taxable Wage Base.
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.l(d))
a. (X) N/A. There shall be no Qualified Non-Elective
Contributions except as provided in Section
11.5(b) and 11.7(h).
b. ( ) The Employer shall make a Qualified Non-Elective
Contribution equal to % of the total
Compensation of all Participants eligible to share in
the allocations.
c. ( ) The Employer may make a Qualified Non-Elective
Contribution in an amount to be
determined by the Employer.
E6 FORFEITURES (Plan Section 4.3(e))
a. Forfeitures of contributions other than matching
contributions shall be...
1. (X) added to the Empioyer's contribution under
the Plan.
2. ( ) allocated to all Participants eligible to
share in the allocations in the same proportion that
each Participant's Compensation for the year bears to
the Compensation of all Participants for such year.
b. Forfeitures of matching contributions shall be...
1. (X) N/A. No matching contributions or match is
fully vested.
2. ( ) used to reduce the Employer's matching
contribution.
3. ( ) allocated to all Participants eligible to
share in the allocations in proportion to each such
Participant's Compensation for the year.
4. ( ) allocated to all Non-Highly Compensated
Employee's eligible to share in the allocations
in proportion to each such Participant's
Compensation for the year.
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.3) With
respect to Plan Years beginning after 1989, a Participant...
a. ( ) shall (Plan may become discriminatory)
b. (X) shall not
be required to complete a Year of Service in order to share
in any Non-Elective Contributions (other
than matching contributions) or Qualified Non-Elective
Contributions. For Plan Years beginning before
1990, the Plan provides that a Participant must complete a
Year of Service to share in the allocations.
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
Any Participant who terminated employment during the Plan
Year (i.e. not actively employed on the last day of the Plan
Year) for reasons other than death, Total and Permanent
Disability or retirement:
a. With respect to Employer Non-Elective Contributions
(other than matching), Qualified Non-Elective
Contributions, and Forfeitures:
1. For Plan Years beginning after 1989,
i. (X) N/A, Plan does not provide for such
contributions.
ii. ( ) shall share in the allocations provided
such Participant completed more than 500
Hours of Service.
iii. ( ) shall share in such allocations
provided such Participant completed a Year of
Service.
iv. ( ) shall not share in such allocations,
regardless of Hours of Service.
2. For Plan Years beginning before 1990,
i. (X) N/A, new Plan, or same as for Plan Years
beginning after 1989.
ii. ( ) shall share in such allocations provided
such Participant completed a Year of
Service.
iii. ( ) shall not share in such
allocations, regardless of Hours of Service.
NOTE If a. 1.iii or iv is selected, the Plan could violate
minimum participation and coverage requirements under Code
Sections 401(a)(26) and 410.
b. With respect to the allocation of Employer Matching
Contributions, a Participant:
1. For Plan Years beginning after 1989,
i. (X) N/A, Plan does not provide for matching
contributions.
ii. ( ) shall share in the allocations,
regardless of Hours of Service.
iii. ( ) shall share in the allocations
provided such Participant completed more than 500
Hours of Service.
iv. ( ) shall share in such allocations provided
such Participant completed a Year of
Service.
v. ( ) shall not share in such allocations,
regardless of Hours of Service.
2. For Plan Years beginning before 1990,
i. (X) N/A, new Plan, or same as years
beginning after 1989.
ii. ( ) shall share in the allocations,
regardless of Hours of Service.
iii. ( ) shall share in such allocations
provided such Participant completed a Year of
Service.
iv. ( ) shall not share in such allocations,
regardless of Hours of Service.
NOTE: If b.1.iv or v is selected, the Plan could violate
minimum participation and coverage requirements under Code
Section 401(a)(26) and 410.
E9 ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
Allocations of earnings with respect to amounts contributed
to the Plan after the previous Anniversary Date or other
valuation date shall be determined...
a. (X) by using a weighted average.
b. ( ) by treating one-half of all such contributions as
being a part of the Participant's
nonsegregated account balance as of the previous
Anniversary Date or valuation date.
c. ( ) by using the method specified in Section 4.3(c).
d. ( ) other ___
El0 LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
a. If any Participant is or was covered under another
qualified defined contribution plan maintained by the
Employer, or if the Employer maintains a welfare
benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section
415(1)(2), under which amounts are treated as Annual
Additions with respect to any Participant in this Plan:
1. ( ) N/A.
2. (X) The provisions of Section 4.4(b) of the Plan
will apply.
3. ( ) Provide the method under which the Plans will
limit total Annual Additions to the
Maximum Permissible Amount, and will properly
reduce any Excess Amounts, in a
manner that precludes Employer discretion.
b. If any Participant is or ever has been a Participant in
a defined benefit plan maintained by the Employer:
1. ( ) N/A.
2. ( ) In any Limitation Year, the Annual Additions
credited to the Participant under this Plan
may not cause the sum of the Defined Benefit Plan
Fraction and the Defined
Contribution Fraction to exceed 1.0. If the
Employer's contribution that would otherwise
be made on the Participant's behalf during the
limitation year would cause the 1.0
limitation to be exceeded, the rate of
contribution under this Plan will be reduced so
that
the sum of the fractions equals 1.0. If the 1.0
limitation is exceeded because of an
Excess Amount, such Excess Amount will be reduced
in accordance with Section
4.4(a)(4) of the Plan.
3. (X) Provide the method under which the Plans
involved will satisfy the 1.0 limitation in a
manner that precludes Employer discretion.
The amount of Annual Addition allocated to any
Participant's Account under this Plan
shall be limited as follows: Except as otherwise
provided in Section 415 of the Internal
Revenue Code, in any case in which an individual
has at any time participated in a
defined benefit plan and a defined contribution
plan maintained by the Employer, the
sum of the defined benefit plan fraction and the
defined contribution plan fraction for
any Limitation Year may not exceed 1.0. For this
purpose, in the event that the
aforesaid 1.0 limitation has been exceeded,
provisions maintained in the defined benefit
plan to freeze or reduce the rate of benefit
accrual to a level necessary to prevent
disqualification under Section 415 of the Internal
Revenue Code shall be applied after
application of provisions contained in the defined
contribution plan to freeze or reduce
the annual additions to a level necessary to
prevent such disqualification.
E11 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
Distributions upon the death of a Participant prior to
receiving any benefits shall...
a. (X) be made pursuant to the election of the
Participant or beneficiary.
b. ( ) begin within 1 year of death for a designated
beneficiary and be payable over the life (or over
a period not exceeding the life expectancy) of such
beneficiary, except that if the beneficiary
is the Participant's spouse, begin within the time the
Participant would have attained age
70 1/2.
c. ( ) be made within 5 years of death for all
beneficiaries.
d. ( ) other ___
El2 LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum
distributions required pursuant to Code
Section 401 (a)(9) shall...
a. ( ) be recalculated at the Participant's election.
b. (X) be recalculated.
c. ( ) not be recalculated.
El3 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to
Section 6.4(a) of the Plan shall not be made
unless the following conditions have been satisfied:
a. (X) N/A. Immediate distributions may be made at
Participant's election.
b. ( ) The Participant has incurred l-Year Break(s) in
Service.
c. ( ) The Participant has reached his or her Early or
Normal Retirement Age.
d. ( ) Distributions may be made at the Participant's
election on or after the Anniversary Date
following termination of employment.
e. ( ) Other ___
El4 FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
Distributions under the Plan may be made...
a. 1. ( ) in lump sums.
2. (X) in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1. ( ) no annuities are allowed (avoids Joint and
Survivor rules).
2. (X) annuities are allowed (Plan Section 6.13 shall not
apply).
NOTE: b. 1. above may not be elected if this is an amendment
to a plan which permitted annuities as a form of
distribution or if this Plan has accepted a plan to plan
transfer of assets from a plan which permitted annuities as
a form of distribution.
c. AND may be made in...
1. (X) cash only (except for insurance or annuity
contracts).
2. ( ) cash or property.
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.30)): When a Non-Key
Employee is a Participant in this Plan and a Defined Benefit
Plan maintained by the Employer, indicate which method shall
be utilized to avoid duplication of top heavy minimum
benefits.
a. ( ) The Employer does not maintain a Defined Benefit
Plan.
b. ( ) A minimum, non-integrated contribution of 5% of
each Non-Key Employee's total
Compensation shall be provided in this Plan, as
specified in Section 4.3(i). (The Defined
Benefit and Defined Contribution Fractions will be
computed using 100% if this choice is
selected.)
c. ( ) A minimum, non-integrated contribution of 7 1/2%
of each Non-Key Employee's total Compensation shall be
provided in this Plan, as specified in Section 4.30).
(If this choice is selected, the Defined Benefit and
Defined Contribution Fractions will be computed using
125% for all Plan Years in which the Plan is Top Heavy,
but not Super Top Heavy.)
d. (X) Specify the method under which the Plans will
provide top heavy minimum benefits for Non-Key
Employees that will preclude Employer discretion and
avoid inadvertent omissions, including any adjustments
required under Code Section 415(e).
A minimum, non-integrated contribution of 3% of
each Non-Key Employee's total Compensation shall
be provided in this Plan.
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top
Heavy purposes where the
Employer maintains a Defined Benefit Plan in addition to
this Plan, shall be based on...
a. ( ) N/A. The Employer does not maintain a defined
benefit plan.
b. (X) Interest Rate: 8.5%
Mortality Table: 1983 Group Annuity
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or
more Defined Contribution Plans.
a. ( ) N/A.
b. ( ) A minimum, non-integrated contribution of 3% of
each Non-Key Employee's total
Compensation shall be provided in the Money Purchase
Plan (or other plan subject to Code
Section 412), where the Employer maintains two (2) or
more non-paired Defined Contribution Plans.
c. (X) Specify the method under which the Plans will
provide top heavy minimum benefits for Non- Key
Employees that will preclude Employer discretion and
avoid inadvertent omissions, including any
adjustments required under Code Section 415(e).
A minimum, non-integrated contribution of 3% of
each Non-Key Employee's total Compensation shall
be provided in this Plan.
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.4)
a. (X) Yes, loans may be made up to $50,000 or 1/2 Vested
interest.
b. ( ) No, loans may not be made.
If YES, (check all that apply)...
c. (X) loans shall be treated as a Directed Investment.
d. ( ) loans shall only be made for hardship or financial
necessity.
e. ( ) the minimum loan shall be $1,000.
f. ( ) $10,000 de minimis loans may be made regardless of
Vested interest. (If selected, Plan may
need security in addition to Vested interest.)
NOTE: Department of Labor Regulations require the
adoption of a separate written loan program setting
forth the requirements outlined in Plan Section 7.4.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.8) are
permitted for the interest in any one or
more accounts.
a. (X) Yes, regardless of the Participant's Vested
interest in the Plan.
b. ( ) Yes, but only with respect to the Participant's
Vested interest in the Plan.
c. ( ) Yes, but only with respect to those accounts which
are 100% Vested.
d. ( ) No directed investments are permitted.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)
a. (X) Yes, transfers from qualified plans (and
rollovers) will be allowed.
b. ( ) No, transfers from qualified plans (and rollovers)
will not be allowed.
AND, transfers shall be permitted...
c. ( ) from any Employee, even if not a Participant.
d. (X) from Participants only.
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.7)
a. ( ) Yes, Voluntary Contributions are allowed subject
to the limits of Section 4.10.
b. (X) No, Voluntary Contributions will not be allowed.
NOTE: TRA '86 subjects voluntary contributions to strict
discrimination rules.
G5 HARDSHIP DISTRIBUTIONS (Plan Sections 6.11 and 11.8)
a. (X) Yes, from any accounts which are 100% Vested.
b. ( ) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to the Participant's Account
only.
d. ( ) No.
NOTE: Distributions from a Participant's Elective
Account are limited to the portion of such account
attributable to such Participant's Deferred
Compensation and earnings attributable thereto up to
December 31, 1988. Also hardship distributions are not
permitted from a Participant's Qualified Non-Elective
Account.
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. ( ) If a Participant has reached the age of ,
distributions may be made, at the Participant's
election, from any accounts which are 100% Vested
without requiring the Participant to terminate
employment.
b. (X) No pre-retirement distribution may be made.
NOTE: Distributions from a Participant's Elective
Account and Qualified Non-Elective Account are not
permitted prior to age 59 1/2.
G7 LIFE INSURANCE (Plan Section 7.2(d)) may be purchased with
Plan contributions.
a. (X) No life insurance may be purchased.
b. ( ) Yes, at the option of the Administrator.
c. ( ) Yes, at the option of the Participant.
AND, the purchase of initial or additional life insurance
shall be subject to the following limitations:
(select all that apply)
d. ( ) N/A, no limitations.
e. ( ) each initial Contract shall have a minimum face
amount of $_____.
f. ( ) each additional Contract shall have a minimum face
amount of $_____.
g. ( ) the Participant has completed ____ Years of
Service.
h. ( ) the Participant has completed _____ Years of
Service while a Participant in the Plan.
i. ( ) the Participant is under age ____ on the Contract
issue date.
j. ( ) the maximum amount of all Contracts on behalf of a
Participant shall not exceed $____.
k. ( ) the maximum face amount of life insurance shall be
$____.
The adopting Employer may not rely on an opinion letter issued by
the National Office of the Internal
Revenue Service as evidence that the plan is qualified under Code
Section 401. In order to obtain reliance
with respect to plan qualification, the Employer must apply to
appropriate Key the District Office for a determination letter.
This Adoption Agreement may be used only in conjunction with
basic Plan document #01. This Adoption Agreement and the basic
Plan document shall together be known as RETIREMENT PLAN
ADMINISTRATIVE SERVICE, LTD. Non-Standardized 401(k) Profit
Sharing Plan and Trust #01-005.
The adoption of this Plan, its qualification by the IRS, and the
related tax consequences are the
responsibility of the Employer and its independent tax and legal
advisors.
RETIREMENT PLAN ADMINISTRATIVE SERVICE, LTD. will notify the
Employer of any amendments
made to the Plan or of the discontinuance or abandonment of the
Plan provided this Plan has been acknowledged by RETIREMENT PLAN
ADMINISTRATIVE SERVICE, LTD. or its authorized representative.
Furthermore, in order to be eligible to receive such
notification, we agree to notify RETIREMENT PLAN ADMINISTRATIVE
SERVICE, LTD. of any change in address.
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this
Plan to be executed on this _____ day of ______________________,
1997. Furthermore, this Plan may not be used unless acknowledged
by RETIREMENT PLAN ADMINISTRATIVE SERVICE, LTD. or its authorized
representative.
EMPLOYER:
American National Savings Bank, F.S.B.
By: ________________________________________
Mercantile-Safe Deposit and Trust Co.,
Trust Division-Employee Benefits Unit
__________________________________________
TRUSTEE
PARTICIPATING EMPLOYER:
American National Insurance Agency, Inc.,
By:___________________________________________
This Plan may not be used, and shall not be deemed to be a
Regional Prototype Plan, unless an authorized representative of
RETIREMENT PLAN ADMINISTRATIVE SERVICE, LTD. has acknowledged the
use of the Plan. Such acknowledgment is for administeriai
purposes only. It acknowledges that the Employer is using the
Plan but does not represent that this Plan, including the choices
selected on the Adoption Agreement, has been reviewed by a
representative of the sponsor or constitutes a qualified
retirement plan.
RETIREMENT PLAN ADMINISTRATIVE SERVICE, LTD.
By:________________________________________
RETIREMENT PLAN ADMINISTRATIVE SERVICE, LTD.
DEFINED CONTRIBUTION PLAN AND TRUST
Copyright 1991, Retirement Plan Administrative Service, Ltd.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS 11
2.2 DETERMINATION OF TOP HEAVY STATUS 11
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 14
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY 15
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES 15
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR 15
2.7 RECORDS AND REPORTS 16
2.8 APPOINTMENT OF ADVISERS 16
2.9 INFORMATION FROM EMPLOYER 16
2.10 PAYMENT OF EXPENSES 16
2.11 MAJORITY ACTIONS 17
2.12 CLAIMS PROCEDURE 17
2.13 CLAIMS REVIEW PROCEDURE 17
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 17
3.2 EFFECTIVE DATE OF PARTICIPATION 17
3.3 DETERMINATION OF ELIGIBILITY 18
3.4 TERMINATION OF ELIGIBILITY 18
3.5 OMISSION OF ELIGIBLE EMPLOYEE 18
3.6 INCLUSION OF INELIGIBLE EMPLOYEE 18
3.7 ELECTION NOT TO PARTICIPATE 18
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE 19
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION 19
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION 20
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS 20
4.4 MAXIMUM ANNUAL ADDITIONS 25
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 30
4.6 TRANSFERS FROM QUALIFIED PLANS 31
4.7 VOLUNTARY CONTRIBUTIONS 32
4.8 DIRECTED INVESTMENT ACCOUNT 32
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS 33
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS 33
4.11 INTEGRATION IN MORE THAN ONE PLAN 33
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND 34
5.2 METHOD OF VALUATION 34
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT 34
6.2 DETERMINATION OF BENEFITS UPON DEATH 34
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 35
6.4 DETERMINATION OF BENEFITS UPON TERMINATION 35
6.5 DISTRIBUTION OF BENEFITS 38
6.6 DISTRIBUTION OF BENEFITS UPON DEATH 42
6.7 TIME OF SEGREGATION OR DISTRIBUTION 45
6.8 DISTRIBUTION FOR MINOR BENEFICIARY 45
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN 45
6.10 PRE-RETIREMENT DISTRIBUTION 46
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP 46
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS 47
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS 47
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE 47
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE 48
7.3 OTHER POWERS OF THE TRUSTEE 49
7.4 LOANS TO PARTICIPANTS 51
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS 52
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES 53
7.7 ANNUAL REPORT OF THE TRUSTEE 53
7.8 AUDIT 53
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE 54
7.10 TRANSFER OF INTEREST 54
7.11 TRUSTEE INDEMNIFICATION 55
7.12 EMPLOYER SECURITIES AND REAL PROPERTY 55
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT 55
8.2 TERMINATION 56
8.3 MERGER OR CONSOLIDATION 56
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS 56
9.2 PARTICIPANT'S RIGHTS 56
9.3 ALIENATION 57
9.4 CONSTRUCTION OF PLAN 57
9.5 GENDER AND NUMBER 57
9.6 LEGAL ACTION 57
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS 58
9.8 BONDING 58
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 58
9.10 INSURER'S PROTECTIVE CLAUSE 58
9.11 RECEIPT AND RELEASE FOR PAYMENTS 58
9.12 ACTION BY THE EMPLOYER 59
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 59
9.14 HEADINGS 59
9.15 APPROVAL BY INTERNAL REVENUE SERVICE 59
9.16 UNIFORMITY 60
9.17 PAYMENT OF BENEFITS 60
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER 60
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS 60
10.3 DESIGNATION OF AGENT 60
10.4 EMPLOYEE TRANSFERS 61
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES 61
10.6 AMENDMENT 61
10.7 DISCONTINUANCE OF PARTICIPATION 61
10.8 ADMINISTRATOR'S AUTHORITY 61
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE 61
ARTICLE XI
CASH OR DEFERRED PROVISIONS
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION 62
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION 63
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS 65
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS 67
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS 69
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS 72
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS 74
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP 77
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases
shall have the meanings set forth herein unless a different
meaning is clearly required by the context:
1.1 "Act" means the Employee Retirement Income Security Act
of 1974, as it may be amended from time to time.
1.2 "Administrator" means the person(s) or entity
designated by the Employer pursuant to Section 2.4 to administer
the Plan on behalf of the Employer.
1.3 "Adoption Agreement" means the separate Agreement which
is executed by the Employer and accepted by the Trustee which
sets forth the elective provisions of this Plan and Trust as
specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any
corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes
the Employer;, any trade or business (whether or not
incorporated) which is under common control (as defined in Code
Section 414(c)) with the Employer; any organization (whether or
not incorporated) which is a member of an affiliated service
group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.5 "Aggregate Account" means with respect to each
Participant, the value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee
contributions, subject to the provisions of Section 2.2.
1.6 "Anniversary Date" means the anniversary date specified
in C3 of the Adoption Agreement.
1.7 "Beneficiary" means the person to whom a share of a
deceased Participant's interest in the Plan is payable, subject
to the restrictions of Sections 6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as
amended or replaced from time to time.
1.9 "Compensation" with respect to any Participant means
such Participant's compensation as specified by the Employer in
E1 of the Adoption Agreement that is paid during the applicable
period. Compensation for any Self-Employed Individual shall be
equal to his Earned Income.
In addition, if specified in the Adoption Agreement,
Compensation for all Plan purposes shall also include
compensation which is not currently includible in the
Participant's gross income by reason of the application of Code
Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be
disregarded. Such amount shall be adjusted at the same time and
in such manner as permitted under Code Section 415(d). In
applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or
one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as
a single Participant, except that for this purpose Family Members
shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before
the close of the year. If, as a result of the application of
such rules, the adjusted $200,000 limitation is exceeded, then
(except for purposes of determining the portion of Compensation
up to the integration level if this plan is integrated), the
limitation be prorated among the affected individuals in
proportion to each such individual's Compensation as determined
under this Section prior to the application of this limitation.
For Plan Years beginning prior to January 1, 1989, the
$200,000 limit (without regard to Family Member aggregation)
shall apply only for Top Heavy Plan Years and shall not be
adjusted.
1.10 "Contract" or "Policy" means any life insurance policy,
retirement income policy, or annuity contract (group or
individual) issued by the Insurer. In the event of any conflict
between the terms of this Plan and the terms of any insurance
contract purchased hereunder, the Plan provisions shall control.
1.11 "Deferred Compensation" means, with respect to any
Participant, that portion of the Participant's total Compensation
which has been contributed to the Plan in accordance with the
Participant's deferral election pursuant to Section 11.2.
1.12 "Early Retirement Date" means the date specified in the
Adoption Agreement on which a Participant or Former Participant
has satisfied the age and service requirement specified in the
Adoption Agreement (Early Retirement Age). A Participant shall
become fully Vested upon satisfying this requirement if still
employed at his Early Retirement Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who
thereafter reaches the age requirement contained herein shall be
entitled to receive iris benefits under this Plan.
1.13 "Earned Income" means with respect to a Self-Employed
Individual, the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which
the personal services of the individual are a material income-
producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions
allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified Plan to the extent
deductible under Code Section 404. In addition, for Plan Years
beginning after December 31, 1989, net earnings shall be
determined with regard to the deduction allowed to the Employer
by Code Section 164(f).
1.14 "Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to the
Participant's deferral election pursuant to Section 11.2. In
addition, if selected in E3 of the Adoption Agreement, the
Employer's matching contribution made pursuant to Section 11.l(b)
shall be considered an Elective Contribution for purposes of the
Plan. Elective Contributions shall be subject to the
requirements of Sections 11.2(b) and 11.2(c) and shall further be
required to satisfy the discrimination requirements of Regulation
1.401(k)-l(b)(3), the provisions of which are specifically
incorporated herein by reference.
1.15 "Eligible Employee" means any Employee specified in D1
of the Adoption Agreement.
1.16 "Employee" means any person who is employed by the
Employer, but excludes any person who is employed as an
independent contractor. The term Employee shall also include
Leased Employees as provided in Code Section 414(n) or (o).
Except as provided in the Non-Standardized Adoption
Agreement, all Employees of all entities which are an Affiliated
Employer will be treated as employed by a single employer.
1.17 "Employer" means the entity specified in the Adoption
Agreement, any Participating Employer (as defined in Section
10.1) which shall adopt this Plan, any successor which shall
maintain this Plan and any predecessor which has maintained this
Plan.
1.18 "Excess Compensation" means, with respect to a Plan
that is integrated with Social Security, a Participant's
Compensation which is in excess of the amount set forth in the
Adoption Agreement.
1.19 "Excess Contributions" means, with respect to a Plan
Year, the excess of Elective Contributions and Qualified Non-
Elective Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such
contributions permitted under Section I 1.4(a).
1.20 "Excess Deferred Compensation" means, with respect to
any taxable year of a Participant, the excess of the aggregate
amount of such Participant's Deferred Compensation and the
elective deferrals pursuant to Section 11.2(f) actually made on
behalf of such Participant for such taxable year, over the dollar
limitation provided for in Code Section 402(g), which is
incorporated herein by reference.
1.21 "Family Member" means, with respect to an affected
Participant, such Participant's spouse, and such Participant's
lineal descendants and ascendants and their spouses, all as
described in Code Section 414(q)(6)(B).
1.22 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (b) renders
investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the
Plan or has any authority or responsibility to do so, or (c) has
any discretionary authority or discretionary, responsibility in
the administration of the Plan, including, but not limited to,
the Trustee, the Employer and its representative body, and the
Administrator.
1.23 "Fiscal Year" means the Employer's accounting year as
specified in the Adoption Agreement.
1.24 "Forfeiture" means that portion of a Participant's
Account that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion
of a Participant's Account, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks
in Service.
Furthermore, for purposes of paragraph (a) above, in
the case of a Terminated Participant whose Vested benefit is
zero, such Terminated Participant shall be deemed to have
received a distribution of this Vested benefit upon his
termination of employment. In addition, the term Forfeiture
shall also include amounts deemed to be Forfeitures pursuant to
any other provision of this Plan.
1.25 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any
reason.
1.26 "414(s) Compensation" with respect to any Employee
means his Compensation as defined in Section 1.9. However, for
purposes of this Section, Compensation shall be Compensation paid
and shall be determined by including, in the case of a non-
standardized Adoption Agreement, any items that are excluded from
Compensation pursuant to the Adoption Agreement. The amount of
"414(s) Compensation" with respect to any Employee shall include
"414(s) Compensation" during the entire twelve (12) month period
ending on the last day of such Plan Year, except that for Plan
Years beginning prior to the later of January 1, 1992, or the
date that is sixty (60) days after the date final Regulations are
issued, "414(s) Compensation" shall only be recognized as of an
Employee's effective date of participation.
In addition, if specified in the Adoption Agreement,
"414(s) Compensation" shall also include compensation which is
not currently includible in the Participant's gross income by
reason of the application Code Sections 125, 402(a)(8),
402(h)(1)(B), or 403(b), plus Elective Contributions attributable
to Deferred Compensation recharacterized as voluntary Employee
contributions pursuant to 11.5(a).
1.27 "415 Compensation" means compensation as defined in
Section 4.4(f)(2).
1.28 "Highly Compensated Employee" means an Employee
described in Code Section 414(q) and the Regulations thereunder
and generally means an Employee who performed services for the
Employer during the "determination year" and is in one or more of
the following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five
percent owners" as defined in Section 1.35(c).
(b) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess
of $75,000.
(c) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess
of $50,000 and were in the Top Paid Group of Employees
for the Plan Year.
(d) Employees who during the "look-back year" were
officers of the Employer (as that term is defined
within the meaning of the Regulations under Code
Section 416) and received "415 Compensation" during the
"look-back year" from the Employer greater than 50
percent of the limit in effect under Code Section
415(b)(1)(A) for any such Plan Year. The number of
officers shall be limited to the lesser of (i) 50
employees; or (ii) the greater of 3 employees or 10
percent of all employees. If the Employer does not
have at least one officer whose annual "415
Compensation" is in excess of 50 percent of the Code
Section 415(b)(1)(A) limit, then the highest paid
officer of the Employer will be treated as a Highly
Compensated Employee.
(e) Employees who are in the group consisting of
the 100 Employees paid the greatest "415 Compensation"
during the "determination year" and are also described
in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-
back year".
The "determination year" shall be the Plan Year for
which testing is being performed, and the "look-back year" shall
be the immediately preceding twelve-month period. However, if
the Plan Year is a calendar year, or if another Plan of the
Employer so provides, then the "look-back year" shall be the
calendar year ending with or within the Plan Year for which
testing is being performed, and the "determination year" (if
applicable) shall be the period of time, if any, which extends
beyond the "look-back year" and ends on the last day of the Plan
Year for which testing is being performed (the "lag period").
With respect to this election, it shall be applied on a uniform
and consistent basis to all plans, entities, and arrangements of
the Employer.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would
otherwise be excluded from a Participant's gross income by reason
of the application of Code Sections 125, 402(a)(8), 402(h)(1)(B)
and, in the case of Employer contributions made pursuant to a
salary reduction agreement, Code Section 403(b). Additionally,
the dollar threshold amounts specified in (b) and (c) above shall
be adjusted at such time and in such manner as is provided in
Regulations. In the case of such an adjustment, the dollar
limits which shall be applied are those for the calendar year in
which the "determination year" or "look back year" begins.
In determining who is a Highly Compensated Employee,
Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)) from the
Employer constituting United States source income within the
meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken
into account as a single employer and Leased Employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any
qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform
and consistent basis for all of the Employer's retirement plans.
In addition, Highly Compensated Former Employees shall be treated
as Highly Compensated Employees without regard to whether they
performed services during the "determination year".
1.29 "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination
year" and was a Highly Compensated Employee in the year of
separation from service or in any "determination year" after
attaining age 55. Notwithstanding the foregoing, an Employee who
separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year
(or year preceding the separation year) or any year after the
Employee attains age 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner".
For purposes of this Section, "determination year", "415
Compensation" and "five percent owner" shall be determined in
accordance with Section 1.28. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees. The
method set forth in this Section for determining who is a "Highly
Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.30 "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.31 "Hour of Service" means (1) each hour for which an
Employee is directly or indirectly compensated or entitled to
compensation by the Employer for the performance of duties during
the applicable computation period; (2) each hour for which an
Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the
employment relationship has terminated) for masons other than
performance of duties (such as vacation, holidays, sickness, jury
duty, disability, lay-off, military duty or leave of absence)
during the applicable computation period; (3) each hour for which
back pay is awarded or agreed to by the Employer without regard
to mitigation of damages. The same Hours of Service shall not be
credited both under (1) or (2), as the case may be, and under
(3).
Notwithstanding the above, (i) no more than 501 Hours
of Service are required to be credited to an Employee on account
of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single
computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account
of a period during which no duties are performed is not required
to be credited to the Employee if such payment is made or due
under a plan maintained solely for the purpose of complying with
applicable workers compensation, or unemployment compensation or
disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an
Employee for medical or medically related expenses incurred by
the Employee.
For purposes of this Section, a payment shall be deemed
to be made by or due from the Employer regardless of whether such
payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund, or insurer, to
which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or
other entity are for the benefit of particular Employees or are
on behalf of a group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for
purposes of accrued benefits, a 1-Year Break in Service, and
employment commencement date (or reemployment commencement date).
The provisions of Department of Labor regulations 2530.200b-2(b)
and (c) are incorporated herein by reference of Service will be
credited for employment with all Affiliated Employers and for any
individual considered to be a Leased Employee pursuant to Code
Sections 41a(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the
method selected in the Adoption Agreement.
1.32 "Insurer" means any legal reserve insurance company
which shall issue one or more policies under the Plan.
1.33 "Investment Manager" means an entity that (a) has the
power to manage, acquire, or dispose of Plan assets and (b)
acknowledges fiduciary responsibility to the Plan in writing.
Such entity must be a person, firm, or corporation registered as
an investment adviser under the Investment Advisers Act of 1940,
a bank, or an insurance company.
1.34 "Joint and Survivor Annuity" means an annuity for the
life of a Participant with a survivor annuity for the life of the
Participant's spouse which is not less than 1/2, nor greater than
the amount of the annuity payable during the joint lives of the
Participant and the Participant's spouse. The Joint and Survivor
Annuity will be the amount of benefit which can be purchased with
the Participant's Vested interest in the Plan.
1.35 "Key Employee" means an Employee as defined in Code
Section 416(i) and the Regulations thereunder. Generally, any
Employee or former Employee (as well as each of his
Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in
one of the following categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under
Code Section 416) having annual "415 Compensation"
greater than 50 percent of the amount in effect under
Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater
than the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan
Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than one-
half percent interest and the largest interests in the
Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section
318) more than five percent (5%) of the outstanding
stock of the Employer or stock possessing more than
five percent (5%) of the total combined voting power of
all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than
five percent (5%) of the capital or profits interest in
the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers,
(d) a "one percent owner" of the Employer having
an annual "415 Compensation" from the Employer of more
than $150,000. "One percent owner" means any person
who owns (or is considered as owning within the meaning
of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing
more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more
than one percent (1%) of the capital or profits
interest in the Employer. in determining percentage
ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers. However, in
determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation"
from each employer required to be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be taken into
account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would
otherwise be excluded from a Participant's gross income by reason
of the application of Code Sections 125, 402(a)(8), 402(h)(1)(B)
and, in the case of Employer contributions made pursuant to a
salary reduction agreement, Code Section 403(b).
1.36 "Late Retirement Date" means the date of, or the first
day of the month or the Anniversary Date coinciding with or next
following, whichever corresponds to the election made for the
Normal Retirement Date, a Participant's actual retirement after
having reached his Normal Retirement Date.
1.37 "Leased Employee" means any person (other than an
Employee of the recipient) who pursuant to an agreement between
the recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and
related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are of a type historically
performed by employees in the business field of the recipient
employer. Contributions or benefits provided a leased employee
by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided
by the recipient employer.
A leased employee shall not be considered an Employee
of the recipient if: (i) such employee is covered by a money
purchase pension plan providing: (1) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as
defined in Code Section 415(c)(3), but including amounts
contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Code Sections
125, 402(a)(8), 402(h), or 403(b), (2) immediate participation,
and (3) full and immediate vesting; and (ii) leased employees do
not constitute more than 20 percent of the recipient' s nonhighly
compensated workforce.
1.38 "Net Profit" means with respect to any Fiscal Year the
Employer's net income or profit for such Fiscal Year determined
upon the basis of the Employer's books of account in accordance
with generally accepted accounting principles, without any
reduction for taxes based upon income, or for contributions made
by the Employer to this Plan and any other qualified plan.
1.39 "Non-Elective Contribution" means the Employer's
contributions to the Plan other than those made pursuant to the
Participant's deferral election made pursuant to Section 11.2 and
any Qualified Non-Elective Contribution. In addition, if
selected in E3 of the Adoption Agreement, the Employer's Matching
Contribution made pursuant to Section 4.3(b) shall be considered
a Non-Elective Contribution for purposes of the Plan.
1.40 "Non-Highly Compensated Participant" means any
Participant who is neither a Highly Compensated Employee nor a
Family Member.
1.41 "Non-Key Employee" means any Employee or former
Employee (and his Beneficiaries) who is not a Key Employee.
1.42 "Normal Retirement Age" means the age specified in the
Adoption Agreement at which time a Participant shall become fully
Vested in his Participant's Account.
1.43 "Normal Retirement Date" means the date specified in
the Adoption Agreement on which a Participant shall become
eligible to have his benefits distributed to him.
1.44 "l-Year Break in Service" means the applicable
computation period during which an Employee has not completed
more than 500 Hours of Service with the Employer. Further,
solely for the purpose of determining whether a Participant has
incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and
paternity leaves of absence."
"Authorized leave of absence" means an unpaid,
temporary cessation from active employment with the Employer
pursuant to an established nondiscriminatory policy, whether
occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for
Plan Years beginning after December 31, 1984, an absence from
work for any period by reason of the Employee's pregnancy, birth
of the Employee's child, placement of a child with the Employee
in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the
absence from work begins, only if credit therefore is necessary
to prevent the Employee from incurring a 1-Year Break in Service,
or, in any other case, in the immediately following computation
period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which
the Administrator is unable to determine such hours normally
credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity
leave of absence" shall not exceed 501.
1.45 "Owner-Employee" means a sole proprietor who owns the
entire interest in the Employer or a partner who owns more than
10% of either the capital interest or the profits interest in the
Employer and who receives income for personal services from the
Employer.
1.46 "Participant" means any Eligible Employee who
participates in the Plan as provided in Section 3.2 and has not
for any reason become ineligible to participate further in the
Plan.
1.47 "Participant's Account" means the account established
and maintained by the Administrator for each Participant with
respect to his total interest under the Plan resulting from (a)
the Employer's contributions in the case of a Profit Sharing Plan
or Money Purchase Plan, and (b) the Employer's Non-Elective
Contributions in the case of a 401(k) Profit Sharing Plan.
1.48 "Participant's Combined Account" means the account
established and maintained by the Administrator for each
Participant with respect to his total interest under the Plan
resulting from the Employer' s contributions.
1.49 "Participant's Elective Account" means the account
established and maintained by the Administrator for each
Participant with respect to his total interest in the Plan and
Trust resulting from the Employer's Elective Contributions and
Qualified Non-Elective Contributions. A separate accounting
shall be maintained with respect to that portion of the
Participant's Elective Account attributable to Elective
Contributions made pursuant to Section 11.2, Employer matching
contributions if they are deemed to be Elective Contributions,
and any Qualified Non-Elective Contributions.
1.50 "Participant's Rollover Account" means the account
established and maintained by the Administrator for each
Participant with respect to his total interest in the Plan
resulting from amounts transferred from another qualified plan or
"conduit" Individual Retirement Account in accordance with
Section 4.6.
1.51 "Plan" means this instrument (hereinafter referred to
as RETIREMENT PLAN ADMINISTRATIVE SERVICE, LTD. Defined
Contribution Plan and Trust Basic Plan Document #01) including
all amendments thereto, and the Adoption Agreement as adopted by
the Employer.
1.52 "Plan Year" means the Plan's accounting year as
specified in C2 of the Adoption Agreement.
1.53 "Pre-Retirement Survivor Annuity" means an immediate
annuity for the life of the Participant's spouse, the payments
under which must be equal to the actuarial equivalent of 50% of
the Participant's Vested interest in the Plan as of the date of
death.
1.54 "Qualified Non-Elective Account" means the account
established hereunder to which Qualified Non-Elective
Contributions are allocated.
1.55 "Qualified Non-Elective Contribution" means the
Employer's contributions to the Plan that are made pursuant to E5
of the Adoption Agreement and Section 11.1(d) which are used to
satisfy the "Actual Deferral Percentage" tests. Qualified Non-
Elective Contributions are nonforfeitable when made and are
distributable only as specified in Sections 11.2(c) and 11.8. In
addition, the Employer's contributions to the Plan that are made
pursuant to Section 11.7(h) and which are used to satisfy the
"Actual Contribution Percentage" tests shall be considered
Qualified Non-Elective Contributions.
1.56 "Qualified Voluntary Employee Contribution Account"
means the account established and maintained by the Administrator
for each Participant with respect to his total interest under the
Plan resulting from the Participant's tax deductible qualified
voluntary employee contributions made pursuant to Section 4.9.
1.57 "Regulation" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or his delegate, and
as amended from time to time.
1.58 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits
under the Plan.
1.59 "Retirement Date" means the date as of which a
Participant retires for reasons other than Total and Permanent
Disability, whether such retirement occurs on a Participant's
Normal Retirement Date, Early or Late Retirement Date (see
Section 6.1).
1.60 "Self-Employed Individual" means an individual who has
earned income for the taxable year from the trade or business for
which the Plan is established, and, also, an individual who would
have had earned income but for the fact that the trade or
business had no net profits for the taxable year. A Self-
Employed Individual shall be treated as an Employee.
1.61 "Shareholder-Employee" means a Participant who owns
more than five percent (5%) of the Employer's outstanding capital
stock during any year in which the Employer elected to be taxed
as a Small Business Corporation under the applicable Code
Section.
1.62 "Short Plan Year" means, if specified in the Adoption
Agreement, that the Plan Year shall be less than a 12 month
period. If chosen, the following rules shall apply in the
administration of this Plan. In determining whether an Employee
has completed a Year of Service for benefit accrual purposes in
the Short Plan Year, the number of the Hours of Service required
shall be proportionately reduced based on the number of days in
the Short Plan Year. The determination of whether an Employee
has completed a Year of Service for vesting and eligibility
purposes shall be made in accordance with Department of Labor
Regulation 2530.203-2(c). In addition, if this Plan is
integrated with Social Serenity, the integration level shall also
be proportionately reduced based on the number of days in the
Short Plan Year.
1.63 "Super Top Heavy Plan" means a plan described in
Section 2.2(b).
1.64 "Taxable Wage Base" means, with respect to any year,
the maximum amount of earnings which may be considered wages for
such year under Code Section 3121(a)(1).
1.65 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than
by death, Total and Permanent Disability or retirement.
1.66 "Top Heavy Plan" means a plan described in Section
2.2(a).
1.67 "Top Heavy Plan Year" means a Plan Year commencing
after December 31, 1983 during which the Plan is a Top Heavy
Plan.
1.68 "Top Paid Group" shall be determined pursuant to Code
Section 414(q) and the Regulations thereunder and generally means
the top 20 percent of Employees who performed services for the
Employer during the applicable year, ranked according to the
amount of "415 Compensation" (as determined pursuant to Section
1.28) received from the Employer during such year. All
Affiliated Employers shall be taken into account as a single
employer, and Leased Employees shall be treated as Employees
pursuant to Code Section 414(n) or (o). Employees who are non-
resident aliens who received no earned income (within the meaning
of Code Section 911(d)(2)) from the Employer constituting United
States source income within the meaning of Code Section 861(a)(3)
shall not be treated as Employees. Additionally, for the purpose
of determining the number of active Employees in any year, the
following additional Employees shall also be excluded, however,
such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2
hours per week;
(c) Employees who normally work less than six (6)
months during a year;, and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of
the Employer are covered under agreements the Secretary of Labor
finds to be collective bargaining agreements between Employee
representatives and the Employer, and the Plan covers only
Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both
the total number of active Employees as well as from the
identification of particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section
shall be applied on a uniform and consistent basis for all
purposes for which the Code Section 414(q) definition is
applicable.
1.69 "Total and Permanent Disability" means the inability to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months. The disability of a Participant shall be determined by a
licensed physician chosen by the Administrator. However, if the
condition constitutes total disability under the federal Social
Security Acts, the Administrator may rely upon such determination
that the Participant is Totally and Permanently Disabled for the
purposes of this Plan. The determination shall be applied
uniformly to all Participants.
1.70 "Trustee" means the person or entity named in B6 of the
Adoption Agreement and any successors.
1.71 "Trust Fund" means the assets of the Plan and Trust as
the same shall exist from time to time.
1.72 "Vested" means the nonforfeitable portion of any
account maintained on behalf of a Participant.
1.73 "Voluntary Contribution Account" means the account
established and maintained by the Administrator for each
Participant with respect to his total interest in the Plan
resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.7.
1.74 "Year of Service" means the computation period of
twelve (12) consecutive months, herein set forth, and during
which an Employee has completed at least 1000 Hours of Service.
For purposes of eligibility for participation, the
initial computation period shall begin with the date on which the
Employee first performs an Hour of Service (employment
commencement date). The computation period beginning after a 1-
Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The succeeding
computation periods shall begin with the first anniversary of the
Employee's employment commencement date. However, if one (1)
Year of Service or less is required as a condition of
eligibility, then after the initial eligibility computation
period, the eligibility computation period shall shift to the
current Plan Year which includes the anniversary of the date on
which the Employee first performed an Hour of Service. An
Employee who is credited with 1,000 Hours of Service in both the
initial eligibility computation period and the first Plan Year
which commences prior to the first anniversary of the Employee's
initial eligibility computation period will be credited with two
Years of Service for purposes of eligibility to participate.
For vesting purposes, and all other purposes not
specifically addressed in this Section, the computation period
shall be the Plan Year, including periods prior to the Effective
Date of the Plan unless specifically excluded pursuant to the
Adoption Agreement.
Years of Service and breaks in service will be measured
on the same computation period.
Years of Service with any predecessor Employer which
maintained this Plan shall be recognized. Years of Service with
any other predecessor Employer shall be recognized as specified
in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to
Section 6.4 of the Plan and the special minimum allocation
requirements of Code Section 416(c) pursuant to Section 4.3(i) of
the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan
Year beginning after December 31, 1983, in which, as of the
Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the Aggregate Accounts
of all Key and Non-Key Employees under this Plan and all
plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan
Year, but such Participant was a Key Employee for any prior
Plan Year, such Participant's Present Value of Accrued
Benefit and/or Aggregate Account balance shall not be taken
into account for purposes of determining whether this Plan
is a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy
Group). In addition, if a Participant or Former Participant
has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on
the Determination Date, any accrued benefit for such
Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is
a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any
Plan Year beginning after December 31, 1983, in which, as of
the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the
Present Value of Accrued Benefits and the Aggregate Accounts
of all Key and Non-Key Employees under this Plan and all
plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of
the most recent valuation occurring within a twelve
(12) month period ending on the Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any
contributions due as of the Determination Date. Such
adjustment shall be the amount of any contributions
actually made after the valuation date but before the
Determination Date, except for the first Plan Year when
such adjustment shall also reflect the amount of any
contributions made after the Determination Date that
are allocated as of a date in that first Plan Year;
(3) for a Money Purchase Plan, contributions that
would be allocated as of a date not later than the
Determination Date, even though those amounts are not
yet made or required to be made.
(4) any Plan distributions made within the Plan Year
that includes the Determination Date or within the four
(4) preceding Plan Years. However, in the case of
distributions made after the valuation date and prior
to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the
extent that such distributions are already included in
the Participant's Aggregate Account balance as of the
valuation date. In the case of a distribution of an
annuity Contract, the amount of such distribution is
deemed to be the current actuarial value of the
Contract, determined on the date of the distribution.
Notwithstanding anything herein to the contrary, all
distributions, including distributions made prior to
January 1, 1984, and distributions under a terminated
plan which if it had not been terminated would have
been required to be included in an Aggregation Group,
will be counted. Further, distributions from the Plan
(including the cash value of life insurance policies)
of a Participant's account balance because of death
shall be treated as a distribution for the purpose of
this paragraph.
(5) any Employee contributions, whether voluntary or
mandatory. However, mounts attributable to tax
deductible qualified voluntary employee contributions
shall not be considered to be a part of the
Participant's Aggregate Account balance.
(6) with respect to unrelated rollovers and plan-to-
plan transfers (ones which are both initiated by the
Employee and made from a plan maintained by one
employer to a plan maintained by another employer), if
this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or
plan-to-plan transfers as a distribution for the
`purposes of this Section. If this Plan is the plan
accepting such rollovers or plan-to-plan transfers, it
shall not consider such rollovers or plan-to-plan
transfers accepted after December 31, 1983 as part of
the Participant's Aggregate Account balance. However,
rollovers or plan-to-plan transfers accepted prior to
January 1, 1984 shall be considered as part of the
Participant's Aggregate Account balance.
(7) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or
made to a plan maintained by the same employer), if
this Plan provides the rollover or plan-to-plan
transfer, it shall not be counted as a distribution for
purposes of this Section. If this Plan is the plan
accepting such rollover or plan-to-plan transfer, it
shall consider such rollover or plan-to-plan transfer
as part of the Participant's Aggregate Account balance,
irrespective of the date on which such rollover or plan-
to-plan transfer is accepted.
(8) For the purposes of determining whether two
employers are to be treated as the same employer in
2.2(c)(6) and 2.2(c)(7) above, all employers aggregated
under Code Section 414(b), (c), (m) and (o) are treated
as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each qualified
plan of the Employer, including any Simplified Employee
Pension Plan, in which a Key Employee is a participant
in the Plan Year containing the Determination Date or
any of the four preceding Plan Years, and each other
qualified plan of the Employer which enables any
qualified plan in which a Key Employee participates to
meet the requirements of Code Sections 401(a)(4) or
410, will be required to be aggregated. Such group
shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan
in the group will be considered a Top Heavy Plan if the
Required Aggregation Group is a Top Heavy Group. No
plan in the Required Aggregation Group will be
considered a Top Heavy Plan if the Required Aggregation
Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan of the Employer, including
any Simplified Employee Pension Plan, not required to
be included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4)
and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group will be considered a Top
Heavy Plan if the Permissive Aggregation Group is not a
Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year
shall be aggregated in order to determine whether such
plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the
last five (5) years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan
Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit
for a Participant other than a Key Employee shall be as
determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, or if no
such single method exists, using a method which results in
benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(o)(1)(C). The
determination of the Present Value of Accrued Benefit shall
be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416
and the Regulations thereunder for the first and second plan
years of a defined benefit plan.
However, any such determination must include present
value of accrued benefit attributable to any Plan
distributions referred to in Section 2.2(c)(4) above, any
Employee contributions referred to in Section 2.2(c)(5)
above or any related or unrelated rollovers referred to in
Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in
the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined
for all Participants.
(h) The Administrator shall determine whether this
Plan is a Top Heavy Plan on the Anniversary Date specified
in the Adoption Agreement. Such determination of the top
heavy ratio shall be in accordance with Code Section 416 and
the Regulations thereunder.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and
remove the Trustee and the Administrator from time to time
as it deems necessary for the proper administration of the
Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the
Code, and the Act.
(b) The Employer shall establish a "funding policy and
method", i.e., it shall determine whether the Plan has a
short run need for liquidity (e.g., to pay benefits) or
whether liquidity is a long run goal and investment growth
(and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding
policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust
Funds. Such "funding policy and method" shall be consistent
with the objectives of this Plan and with the requirements
of Title I of the Act.
(c) The Employer may, in its discretion, appoint an
Investment Manager to manage all or a designated portion of
the assets of the Plan. in such event, the Trustee shall
follow the directive of the Investment Manager in investing
the assets of the Plan managed by the Investment Manager.
(d) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions
of this Plan or pursuant to procedures established
hereunder. This requirement may be satisfied by formal
periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day
conduct and evaluation, or through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the
Employer, shall be eligible to serve as an Administrator. Any
person so appointed shall signify his acceptance by filing
written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or
be removed by the Employer by delivery of written notice of
removal, to take effect at a date specified therein, or upon
delivery to the Administrator if no date is specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to
this position. If the Employer does not appoint an
Administrator, the Employer will function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the
Employer and accepted in writing by each Administrator. In the
event that no such delegation is made by the Employer, the
Administrators may allocate the responsibilities among
themselves, in which event the Administrators shall notify the
Employer and the Trustee in writing of such action and specify
the responsibilities of each Administrator. The Trustee
thereafter shall accept and rely upon any documents executed by
the appropriate Administrator until such time as the Employer or
the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants
and their Beneficiaries, subject to the specific terms of the
Plan. The Administrator shall administer the Plan in accordance
with its terms and shall have the power and discretion to
construe the terms of the Plan and determine all questions
arising in connection with the administration, interpretation,
and application of the Plan. Any such determination by the
Administrator shall be conclusive and binding upon all persons.
The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or
advisable to carry out the purpose of the Plan; provided,
however, that any procedure, discretionary act, interpretation or
construction shall be done in a nondiscriminatory manner based
upon uniform principles consistently applied and shall be
consistent with the intent that the Plan shall continue to be
deemed a qualified plan under the terms of Code Section 401(a),
and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this
Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited
to, the following:
(a) the discretion to determine all questions relating
to the eligibility of Employees to participate or remain a
Participant hereunder and to receive benefits under the
Plan:
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;,
(c) to authorize and direct the Trustee with respect
to all nondiscretionary or otherwise directed `disbursements
from the Trust Fund;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to
make and publish such rules for regulation of the Plan as
are consistent with the terms hereof;
(f) to determine the size and type of any Contract to
be purchased from any Insurer, and to designate the Insurer
from which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or
desirable to be contributed to the Trust Fund;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the
Plan in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
(i) to prepare and distribute to Employees a procedure
for notifying Participants and Beneficiaries of their rights
to elect Joint and Survivor Annuities and Pre-Retirement
Survivor Annuities if required by the Code and Regulations
thereunder;,
(j) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken
and shall keep all other books of account, records, and other
data that may be necessary for proper administration of the Plan
and shall be responsible for supplying all information and
reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and
other persons as the Administrator or the Trustee deems necessary
or desirable in connection with the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employer shall supply full and timely information to the
Administrator on all matters relating to the Compensation of all
Participants, their Hours of Service, their Years of Service,
their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of
such of the foregoing facts as may be pertinent to the Trustee's
duties under the Plan. The Administrator may rely upon such
information as is supplied by the Employer and shall have no duty
or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include
any expenses incident to the functioning of the Administrator,
including, but not limited to, fees of accountants, counsel, and
other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall
constitute a liability of the Trust Fund. However, the Employer
may reimburse the Trust Fund for any administration expense
incurred. Any administration expense paid to the Trust Fund as a
reimbursement shall not be considered an Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall
be more than one Administrator, they shall act by a majority of
their number, but may authorize one or more of them to sign all
papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a
claim shall be furnished to the claimant within 90 days after the
application is filed. In the event the claim is denied, the
reasons for the denial shall be specifically set forth in the
notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect
the claim will be provided. In addition, the claimant shall be
furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator
pursuant to Section 2.12 shall be entitled to request the
Administrator to give further consideration to his claim by
filing with the Administrator a written request for a hearing.
Such request, together with a written statement of the reasons
why the claimant believes his claim should be allowed, shall be
filed with the Administrator no later than 60 days after receipt
of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or
any other representative of his choosing and expense and at which
the claimant shall have an opportunity to submit written and oral
evidence and arguments in support of his claim. At the hearing
(or prior thereto upon 5 business days written notice to the
Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the
Administrator which are pertinent to the claim at issue and its
disallowance. Either the claimant or the Administrator may cause
a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such
transcripts shall be borne by the party causing the court
reporter to attend the hearing. A final decision as to the
allowance of the claim shall be made by the Administrator within
60 days of receipt of the appeal (unless there has been an
extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are
communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for
the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate
hereunder on the date he has satisfied the requirements specified
in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a
Participant shall become a Participant effective as of the day
specified in the Adoption Agreement.
In the event an Employee who has satisfied the Plan's
eligibility requirements and would otherwise have become a
Participant shall go from a classification of a noneligible
Employee to an Eligible Employee, such Employee shall become a
Participant as of the date he becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's
eligibility requirements and would otherwise become a Participant
shall go from a classification of an Eligible Employee to a
noneligible Employee and becomes ineligible to participate and
has not incurred a 1-Year Break in Service, such Employee shall
participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a 1-Year Break
in Service, eligibility will be determined under the Break in
Service rules of the Plan.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information
furnished by the Employer. Such determination shall be
conclusive and binding upon all persons, as long as the same is
made pursuant to the Plan and the Act. Such determination shall
be subject to review per Section 2.13.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of
an Eligible Employee to an ineligible Employee, such Former
Participant shall continue to vest in his interest in the Plan
for each Year of Service completed while a noneligible Employee,
until such time as his Participant's Account shall be forfeited
or distributed pursuant to the terms of the Plan. Additionally,
his interest in the Plan shall continue to share in the earnings
of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as
a Participant in the Plan is erroneously omitted and discovery of
such omission is not made until after a contribution by his
Employer for the year has been made, the Employer shall make a
subsequent contribution, if necessary after the application of
Section 4.3(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not
been omitted. Such contribution shall be made regardless of
whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and
discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not
be entitled to recover the contribution made with respect to the
ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the
amount contributed with respect to the ineligible person shall
constitute a Forfeiture for the Plan Year in which the discovery
is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer,
elect voluntarily not to participate in the Plan. The election
not to participate must be communicated to the Employer, in
writing, at least thirty (30) days before the beginning of a Plan
Year. For Standardized Plans, a Participant or an Eligible
Employee may not elect not to participate. Furthermore, the
foregoing election not to participate shall not be available with
respect to partners in a partnership.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits
for one or more Owner-Employees who control both the
business for which this Plan is established and one or more
other entities, this Plan and the plan established for other
trades or businesses must, when looked at as a single Plan,
satisfy Code Sections 401(a) and (d) for the Employees of
this and all other entities.
(b) If the Plan provides contributions or benefits for
one or more Owner-Employees who control one or more other
trades or businesses, the employees of the other trades or
businesses must be included in a plan which satisfies Code
Sections 401(a) and (d) and which provides contributions and
benefits not less favorable than provided for Owner-
Employees under this Plan.
(c) If an individual is covered as an Owner-Employee
under the plans of two or more trades or businesses which
are not controlled and the individual controls a trade or
business, then the benefits or contributions of the
employees under the plan of the trades or businesses which
are controlled must be as favorable as those provided for
him under the most favorable plan of the trade or business
which is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-
Employee, or two or more Owner-Employees, will be considered
to control an entity if the Owner-Employee, or two or more
Owner-Employees together:
(1) own the entire interest in an unincorporated
entity, or
(2) in the case of a partnership, own more than 50
percent of either the capital interest or the profits
interest in the partnership.
(e) For purposes of the preceding sentence, an Owner-
Employee, or two or more Owner-Employees shall be treated as
owning any interest in a partnership which is owned,
directly or indirectly, by a partnership which such Owner-
Employee, or such two or more Owner-Employees, are
considered to control within the meaning of the preceding
sentence.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan -
(1) The Employer shall make contributions over such
period of years as the Employer may determine on the
following basis. On behalf of each Participant
eligible to share in allocations, for each year of his
participation in this Plan, the Employer shall
contribute the amount specified in the Adoption
Agreement. All contributions by the Employer shall be
made in cash or in such property as is acceptable to
the Trustee. The Employer shall be required to obtain
a waiver from the Internal Revenue Service for any Plan
Year in which it is unable to make the full required
contribution to the Plan. In the event a waiver is
obtained, this Plan shall be deemed to be an
individually designed plan.
(2) For any Plan Year beginning prior to January 1,
1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after
January 1, 1990, the Employer shall not contribute on
behalf of a Participant who performs less than a Year
of Service during any Plan Year, unless there is a
Short Plan Year or a contribution is required pursuant
to 4.3(h).
(3) Notwithstanding the foregoing, the Employer's
contribution for any Fiscal Year shall not exceed the
maximum amount allowable as a deduction to the Employer
under the provisions of Code Section 404. However, to
the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution
even if it exceeds the amount which is deductible under
Code Section 404.
(b) For a Profit Sharing Plan -
(1) For each Plan Year, the Employer shall contribute
to the Plan such amount as specified by the Employer in
the Adoption Agreement. Notwithstanding the foregoing,
however, the Employer's contribution for any Fiscal
Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions Of Code
Section 404. All contributions by the Employer shall
be made in cash or in such property as is acceptable to
the Trustee.
(2) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer
shall make a contribution even if it exceeds current or
accumulated Net Profit or the amount which is
deductible under Code Section 404.
4.2 TIE OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time
prescribed by law, including extensions of time, for the filing
of the Employer's federal income tax return for the Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date, or
other valuation date, all amounts allocated to each such
Participant as set forth herein.
(b) The Employer shall provide the Administrator with
all information required by the Administrator to make a
proper allocation of the Employer's contributions for each
Plan Year. Within a reasonable period of time after the
date of receipt by the Administrator of such information,
the Administrator shall allocate such contribution as
follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be
allocated to each Participant's Combined Account
in the manner set forth in Section 4.1 herein and
as specified in Section E2 of the Adoption
Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account, except as
provided in Section 4.3%, in a dollar amount equal
to 5.7% of the sum of each Participant's total
Compensation plus Excess Compensation. If the
Employer does not contribute such amount for all
Participants, each Participant will be allocated a
share of the contribution in the same proportion
that his total Compensation plus his total Excess
Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of
all Participants for that year.
Regardless of the preceding, 4.3% shall be substituted
for 5.7% above if Excess Compensation is based on more
than 20% and less than or equal to 80% of the Taxable
Wage Base. If Excess Compensation is based on less
than 100% and more than 80% of the Taxable Wage Base,
then 5.4% shall be substituted for 5.7% above.
(ii) The balance of the Employer's contribution
over the amount allocated above, if any, shall be
allocated to each Participant's Combined Account
in the same proportion that his total Compensation
for the Year bears to the total Compensation of
all Participants for such year.
(iii) Except, however, for any Plan Year
beginning prior to January 1, 1990, and if elected
in the non-standardized Adoption Agreement for any
Plan Year beginning on or after January 1, 1990, a
Participant who performs less than a Year of
Service during any Plan Year shall not share in
the Employer's contribution for that year, unless
there is a Short Plan Year or a contribution is
required pursuant to Section 4.3(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account in the
same proportion that each such Participant's
Compensation for the year bears to the total
Compensation of all Participants for such year.
(ii) Except, however, for any Plan Year beginning
prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan
Year beginning on or after January 1, 1990, a
Participant who performs less than a Year of
Service during any Plan Year shall not share in
the Employer's contribution for that year, unless
there is a Short Plan Year or a contribution is
required pursuant to Section 4.3(h).
(c) As of each Anniversary Date or other valuation
date, before allocation of Employer contributions and
Forfeitures, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the
same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of
all Participants' and Former Participants' nonsegregated
accounts as of such date. If any nonsegregated account of a
Participant has been distributed prior to the Anniversary
Date or other valuation date subsequent to a Participant's
termination of employment, no earnings or losses shall be
credited to such account.
Notwithstanding the above, with respect to
contributions made to the Plan after the previous
Anniversary Date or allocation date, the method specified in
the Adoption Agreement shall be used.
(d) Participants' Accounts shall be debited for any
insurance or annuity premiums paid, if any, and credited
with any dividends or interest received on insurance
contracts.
(e) As of each Anniversary Date any amounts which
became Forfeitures since the last Anniversary Date shall
first be made available to reinstate previously forfeited
account balances of Former Participants, if any, in
accordance with Section 6.4(g)(2) or be used to satisfy any
contribution that may be required pursuant to Section 3.5
and/or 6.9. The remaining Forfeitures, if any, shall be
treated in accordance with the Adoption Agreement.
Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual
addition" (as defined in Section 4.4) to any Participant's
Account to exceed the amount allowable by the Code, the
excess shall be reallocated in accordance with Section 4.5.
Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized
Adoption Agreement for any Plan Year beginning on or after
January 1, 1990, a Participant who performs less than a Year
of Service during any Plan Year shall not share in the Plan
Forfeitures for that year, unless there is a Short Plan Year
or a contribution required pursuant to Section 4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan
Year, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account
of each Non-Key Employee shall be equal to at least three
percent (3%) of such Non-Key Employee's "415 Compensation"
(reduced by contributions and forfeitures, if any, allocated
to each Non-Key Employee in any defined contribution plan
included with this plan in a Required Aggregation Group).
However, if (i) the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account
of each Key Employee for such Top Heavy Plan Year is less
than three percent (3%) of each Key Employee's "415
Compensation" and (ii) this Plan is not required to be
included in an Aggregation Group to enable a defined benefit
plan to meet the requirements of Code Section 401(a)(4) or
410, the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Combined Account of each Non-
Key Employee shall be equal to the largest percentage
allocated to the Participant's Combined Account of any Key
Employee.
However, for each Non-Key Employee who is a Participant
in a paired Profit Sharing Plan or 401(k) Profit Sharing
Plan and a paired Money Purchase Plan, the minimum 3%
allocation specified above shall be provided in the Money
Purchase Plan.
If this is an integrated Plan, then for any Top Heavy
Plan Year the Employer's contribution shall be allocated as
follows:
(1) An amount equal to 3% multiplied by each
Participant's Compensation for the Plan Year shall be
allocated to each Participant's Account. If the
Employer does not contribute such amount for all
Participants, the amount shall be allocated to each
Participant's Account in the same proportion that his
total Compensation for the Plan Year bears to the total
Compensation `of all Participants for such year.
(2) The balance of the Employer's contribution over
the amount allocated under subparagraph (1) hereof
shall be allocated to each Participant's Account in a
dollar amount equal to 3% multiplied by a Participant's
Excess Compensation. If the Employer does not
contribute such amount for all Participants, each
Participant will be allocated a share of the
contribution in the same proportion that his Excess
Compensation bears to the total Excess Compensation of
all Participants for that year.
(3) The balance of the Employer's contribution over
the amount allocated under subparagraph (2) hereof
shall be allocated to each Participant's Account in a
dollar amount equal to 2.7% multiplied by the sum of
each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute such
amount for all Participants, each Participant will be
allocated a share of the contribution in the same
proportion that his total Compensation plus his total
Excess Compensation for the Plan Year bears to the
total Compensation plus the total Excess Compensation
of all Participants for that year.
Regardless of the preceding, 1.3% shall be substituted
for 2.7% above if Excess Compensation is based on more
than 20% and less than or equal to 80% of the Taxable
Wage Base. If Excess Compensation is based on less
than 100% and more than 80% of the Taxable Wage Base,
then 2.4% shall be substituted for 2.7% above.
(4) The balance of the Employer's contributions over
the amount allocated above, if any, shall be allocated
to each Participant's Account in the same proportion
that his total Compensation for the Plan Year bears to
the total Compensation of all Participants for such
year.
For each Non-Key Employee who is a Participant in this
Plan and another non-paired defined contribution plan
maintained by the Employer, the minimum 3% allocation
specified above shall be provided as specified in F3 of the
Adoption Agreement.
(g) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's
Combined Account of any Key Employee shall be equal to the
ratio of the sum of the Employer's contributions and
Forfeitures allocated on behalf of such Key Employee divided
by the "415 Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum
allocations set forth in this Section shall be allocated to
the Participant's Combined Account of all Non-Key Employees
who are Participants and who are employed by the Employer on
the last day of the Plan Year, including Non-Key Employees
who have (1) failed to complete a Year of Service; or (2)
declined to make mandatory contributions (if required) or,
in the case of a cash or deferred arrangement, elective
contributions to the Plan.
(i) Notwithstanding anything herein to the contrary,
in any Plan Year in which the Employer maintains both this
Plan and a defined benefit pension plan included in a
Required Aggregation Group which is top heavy, the Employer
shall not be required to provide a Non-Key Employee with
both the full separate minimum defined benefit plan benefit
and the full separate defined contribution plan allocations.
Therefore, if the Employer maintains both a Defined Benefit
and a Defined Contribution Plan that are a Top Heavy Group,
the top heavy minimum benefits shall be provided as follows:
(1) Applies if F1b of the Adoption Agreement is
Selected -
(i) The requirements of Section 2.1 shall apply
except that each Non-Key Employee who is a
Participant in the Profit Sharing Plan or Money
Purchase Plan and who is also a Participant in the
Defined Benefit Plan shall receive a minimum
allocation of five percent (5%) of such
Participant's "415 Compensation" from the
applicable Defined Contribution Plan(s).
(ii) For each Non-Key Employee who is a
Participant only in the Defined Benefit Plan the
Employer will provide a minimum non-integrated
benefit equal to 2% of his highest five
consecutive year average "415 Compensation" for
each Year of Service while a Participant in the
Plan, in which the Plan is top heavy, not to
exceed ten.
(iii) For each Non-Key Employee who is a
Participant only in this Defined Contribution
Plan, the Employer shall provide a contribution
equal to 3% of his "415 Compensation".
(2) Applies if F1c of the Adoption Agreement is
Selected -
(i) The minimum allocation specified in Section
4.3(i)(1)(i) shall be 7 1/2% if the Employer
elects in the Adoption Agreement for years in
which the Plan is Top Heavy, but not Super Too
Heavy.
(ii) The minimum benefit specified in Section
4.3(i)(1)(ii) shall be 3% if the Employer elects
in the Adoption Agreement for years in which the
Plan is Top Heavy, but not Super Top Heavy.
(iii) The minimum allocation specified in
Section 4.3(i)(1)(iii) shall be 4% if the Employer
elects in the Adoption Agreement for years in
which the Plan is Top Heavy, but not Super Top
Heavy.
(j) For the purposes of this Section, "415
Compensation" shall be limited to $200,000 (unless adjusted
in such manner as permitted under Code Section 415(d)).
However, for Plan Years beginning prior to January 1, 1989,
the $200,000 limit shall apply only for Top Heavy Plan Years
and shall not be adjusted.
(k) Notwithstanding anything herein to the contrary,
any Participant who terminated employment during the Plan
Year for reasons other than death, Total and Permanent
Disability, or retirement shall or shall not share in the
allocations of the Employer's Contributions and Forfeitures
as provided in the Adoption Agreement. Notwithstanding the
foregoing, for Plan Years beginning after 1989, if this is a
standardized Plan, any such terminated Participant shall
share in the allocations as provided in this Section
provided such Participant completed more than 500 Hours of
Service.
(l) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death, Total and
Permanent Disability, or retirement shall share in the
allocations as provided in this Section regardless of
whether they completed a Year of Service during the Plan
Year.
(m) If a Former Participant is reemployed after five
(5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his employer derived
account balance in the Plan attributable to post-break
service.
(n) Notwithstanding any election in the Adoption
Agreement to the contrary, if this is a non-standardized
Plan that would otherwise fail to meet the requirements of
Code Sections 401(a)(26), 410(b)(1), or 410(b)(2)(A)(i) and
the Regulations thereunder because Employer Contributions
have not been allocated to a sufficient number or percentage
of Participants for a Plan Year, then the following rules
shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution and Forfeitures for the Plan
Year shall be expanded to include the minimum number of
Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified
above. The specific participants who shall become
eligible under the terms of this paragraph shall be
those who are actively employed on the last day of the
Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of
Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group
of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be
further expanded to include the minimum number of
Participants who are not actively employed on the last
day of the Plan Year as are necessary, to satisfy the
applicable test. The specific Participants who shall
become eligible to share shall be those Participants,
when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service
in the Plan Year before terminating employment.
Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that
have previously been allocated to Participants may not be
reallocated to satisfy these requirements. In such event,
the Employer shall make an additional contribution equal to
the amount such affected Participants would have received
had they been included in the allocations, even if it
exceeds the amount which would be deductible under Code
Section 404. Any adjustment to the allocations pursuant to
this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
4.4 MAXIMUM ANNUAL ADDITIONS
(a)(1) If the Participant does not participate in,
and has never participated in another qualified plan
maintained by the Employer, or a welfare benefit fund (as
defined in Code Section 419(e)), maintained by the Employer,
or an individual medical account (as defined in Code Section
415(l)(2)) maintained by the Employer, which provides Annual
Additions, the amount of Annual Additions which may be
credited to the Participant's accounts for any Limitation
Year shall not exceed the lesser of the Maximum Permissible
Amount or any other limitation contained in this Plan. If
the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts would
cause the Annual Additions for the Limitation Year to exceed
the Maximum Permissible Amount, the amount contributed or
allocated will be reduced so that the Annual Additions for
the Limitation Year will equal the Maximum Permissible
Amount.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation of
the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly
situated.
(3) As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible
Amount for such Limitation Year shall be determined on
the basis of the Participant's actual compensation for
such Limitation Year.
(4) If pursuant to Section 4.4(a)(2) or as a result of
the allocation of Forfeitures, there is an Excess
Amount, the excess will be disposed of as follows:
(i) Any nondeductible Voluntary Employee
Contributions. to the extent they would reduce
the Excess Amount, will be returned to the
Participant;
(ii) If, after the application of subparagraph
(i), an Excess Amount still exists, and the
Participant is covered by the Plan at the end of
the Limitation Year, the Excess Amount in the
Participant's account will be used to reduce
Employer contributions (including any allocation
of Forfeitures) for such Participant in the next
Limitation Year, and each succeeding Limitation
Year if necessary;
(iii) If, after the application of
subparagraph (i), an Excess Amount still exists,
and the Participant is not covered by the Plan at
the end of a Limitation Year, the Excess Amount
will be held unallocated in a suspense account.
The suspense account will be applied to reduce
future Employer contributions (including
allocation of any Forfeitures) for all remaining
Participants in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(iv) If a suspense account is in existence at any
time during a Limitation Year pursuant to this
Section, it will not participate in the allocation
of investment gains and losses. If a suspense
account is in existence at any time during a
particular limitation year, all amounts in the
suspense account must be allocated and reallocated
to participants' accounts before any employer
contributions or any employee contributions may be
made to the plan for that limitation year. Excess
amounts may not be distributed to participants or
former participants.
(b)(1) This subsection applies if, in addition to
this Plan, the Participant is covered under another
qualified Regional Prototype defined contribution plan
maintained by the Employer, or a welfare benefit fund (as
defined in Code Section 419(e)) maintained by the Employer,
or an individual medical account (as defined in Code Section
415(1)(2)) maintained by the Employer, which provides Annual
Additions, during any Limitation Year. The Annual Additions
which may be credited to a Participant's accounts under
tiffs Plan for any such Limitation Year shall not exceed the
Maximum Permissible Amount reduced by the Annual Additions
credited to a Participant's accounts under the other plans
and welfare benefit funds for the same Limitation Year. If
the Annual Additions with respect to the Participant under
other defined contribution plans and welfare benefit funds
maintained by the Employer are less than the Maximum
Permissible Amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's
accounts under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the
amount contributed or allocated will be reduced so that the
Annual Additions under all such plans and welfare benefit
funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to
the Participant under such other defined contribution plans
and welfare benefit funds in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will
be contributed or allocated to the Participant's account
under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a
Participant in the manner described in Section
4.4(a)(2).
(3) As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible
Amount for the Limitation Year will be determined on
the basis of the Participant's actual Compensation for
the Limitation Year.
(4) If, pursuant to Section 4.4(b)(2) or as a result
of the allocation of Forfeitures, a Participant's
Annual Additions under this Plan and such other plans
would result in an Excess Amount for a Limitation Year,
the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual
Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been
allocated first regardless of the actual allocation
date.
(5) If an Excess Amount was allocated to a Participant
on an allocation date of this Plan which coincides with
an allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such
date, times
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the Limitation
Year as of such date under this Plan to (2) the
total Annual Additions allocated to the
Participant for the Limitation Year as of such
date under this and all the other qualified
defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be
disposed in the manner described in Section 4.4(a)(4).
(c) If the Participant is covered under another
qualified defined contribution plan maintained by the
Employer which is not a Regional Prototype Plan, Annual
Additions which may be credited to the Participant's account
under this Plan for any Limitation Year will be limited in
accordance with Section 4.4(b), unless the Employer provides
other limitations in the Adoption Agreement.
(d) If the Employer maintains, or at any time
maintained, a qualified defined benefit plan covering any
Participant in this Plan the sum of the Participant's
Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction will not exceed 1.0 in any Limitation Year. The
Annual Additions which may be credited to the Participant's
account under this Plan for any Limitation Year will be
limited in accordance with the Limitation on Allocations
Section of the Adoption Agreement.
(e) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan
to another is not an "annual addition". In addition, the
following are not Employee contributions for the purposes of
Section 4.4(f)(1)(2): (1) rollover contributions (as defined
in Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and
408(d)(3)); (2) repayments of loans made to a Participant
from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-
outs); (4) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a
simplified employee pension excludable from gross income
under Code Section 408(k)(6).
(f) For purposes of this Section, the following terms
shall be defined as follows:
(1) Annual Additions means the sum credited to a
Participant's accounts for any Limitation Year of (1)
Employer contributions, (2) effective with respect to
"limitation years" beginning after December 31, 1986,
Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual
medical account, as defined in Code Section 415(1)(2),
which is pan of a pension or annuity plan maintained by
the Employer and (5) amounts derived from contributions
paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to
post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit fund (as
defined in Code Section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation"
percentage limitation referred to in paragraph (a)(2)
above shall not apply to: (1) any contribution for
medical benefits (within the meaning of Code Section
419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition", or (2) any
amount otherwise treated as an "annual addition" under
Code Section 415(1)(1). Notwithstanding the foregoing,
for "limitation years" beginning prior to January 1,
1987, only that portion of Employee contributions equal
to the lesser of Employee contributions in excess of
six percent (6%) of "415 Compensation" or one-half of
Employee contributions shall be considered an "annual
addition".
For this purpose, any Excess Amount applied under
Sections 4.4(a)(4) and 4.4(b)(6) in the Limitation Year
to reduce Employer contributions shall be considered
Annual Additions for such Limitation Year.
(2) Compensation means a Participant's earned income,
wages, salaries, fees for professional services and
other amounts received for personal services actually
rendered in the course of employment with the Employer
maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on
insurance premiums, tips, and bonuses) and excluding
the following:
(i) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in
which contributed, or Employer contributions under
a simplified employee pension plan to the extent
such contributions are excludable from the
Employee's gross income, or any distributions from
a plan of deferred compensation;
(ii) contributions made by the Employer to a plan
of deferred compensation to the extent that all or
a portion of such contributions are
recharacterized as a voluntary Employee
contribution;
(iii) amounts realized from the exercise of a
non-qualified stock option, or when restricted
stock (or property) held by an Employee becomes
freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iv) amounts realized from the sale, exchange or
other disposition of stock acquired under a
qualified stock option; and
(v) other amounts which received special tax
benefits, or contributions made by an Employer
(whether or not under a salary reduction
agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether
or not the contributions are excludable from the
gross income of the Employee).
For purposes of applying the limitations of this
Section 4.4, Compensation for any Limitation Year is
the Compensation actually paid or includible in gross
income during such year. Notwithstanding the preceding
sentence, Compensation for a Participant in a profit-
sharing plan who is permanently and totally disabled
(as defined in Code Section 22(e)(3)) is the
Compensation such Participant would have received for
the Limitation Year if the Participant had been paid at
the rate of Compensation paid immediately before
becoming permanently and totally disabled; such imputed
Compensation for the disabled Participant may be taken
into account only if the Participant is not a Highly
Compensated Employee and contributions made on behalf
of such Participant are nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the
numerator of which is the sum of the Participant's
Projected Annual Benefits under all the defined benefit
plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of
125 percent of the dollar limitation determined for the
Limitation Year under Code Sections 415(b) and (d) or
140 percent of his Highest Average Compensation
including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the
Participant had accrued as of the end of the close of
the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation
Years beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan
Year, 100 shall be substituted for 125 unless the extra
minimum allocation is being made pursuant to the
Employer's election in F1 of the Adoption Agreement.
However, for any Plan Year in which this Plan is a
Super Top Heavy Plan, 100 shall be substituted for 125
in any event.
(4) Defined Contribution Dollar Limitation means
$30,000, or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Code Section
415(b)(1) as in effect for the Limitation Year.
(5) Defined Contribution Fraction means a fraction,
the numerator of which is the sum of the Annual
Additions to the Participant's account under all the
defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all
prior Limitation Years, (including the Annual Additions
attributable to the Participant's nondeductible
voluntary employee contributions to any defined benefit
plans, whether or not terminated, maintained by the
Employer and the annual additions attributable to all
welfare benefit funds, as defined in Code Section
419(e), and individual medical accounts, as defined in
Code Section 415(l)(2), maintained by the Employer),
and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior
Limitation Years of Service with the Employer
(regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate
amount in any Limitation Year is the lesser of 125
percent of the Defined Contribution Dollar Limitation
or 35 percent of the Participant's Compensation for
such year. For Limitation Years beginning prior to
January 1, 1987, the "annual addition" shall not be
recomputed to treat all Employee contributions as an
Annual Addition.
If the Employee was a Participant as of the end of the
first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in
existence on May 5, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction
and the Defined Benefit Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2)
the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation
Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions `of the plan
made after May 5, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan
Year, 100 shall be substituted for 125 unless the extra
minimum allocation is being made pursuant to the
Employer's election in F1 of the Adoption Agreement.
However, for any Plan Year in which this Plan is a
Super Top Heavy Plan, 100 shall be substituted for 125
in any event.
(6) Employer means the Employer that adopts this Plan
and all Affiliated Employers, except that for purposes
of this Section, Affiliated Employers shall be
determined pursuant to the modification made by Code
Section 415(h).
(7) Excess Amount means the excess of the
Participant's Annual Additions for the Limitation Year
over the Maximum Permissible Amount.
(8) Highest Average Compensation means the average
Compensation for the three consecutive Years of Service
with the Employer that produces the highest average. A
Year of Service with the Employer is the 12 consecutive
month period defined in Section El of the Adoption
Agreement which is used to determine Compensation under
the Plan.
(9) Limitation Year means the Compensation Year (a 12
consecutive month period) as elected by the Employer in
the Adoption Agreement All qualified plans maintained
by the Employer must use the same Limitation Year. If
the Limitation Year is amended to a different 12
consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year in which the
amendment is made.
(10) Maximum Permissible Amount means the maximum
Annual Addition that may be contributed or allocated to
a Participant's account under the plan for any
Limitation Year, which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation,
or
(ii) 25 percent of the Participant's Compensation
for the Limitation Year.
The Compensation Limitation referred to in (ii)
shall not apply to any contribution for medical
benefits (within the meaning of Code Sections
401(h) or 419A(f)(2)) which is otherwise treated
as an annual addition under Code Sections
415(1)(1) or 419A(d)(2).
If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different
12 consecutive month period, the Maximum Permissible
Amount will not exceed the Defined Contribution Dollar
Contribution multiplied by the following fraction:
number of months in the short Limitation Year
12
(11) Projected Annual Benefit means the annual
retirement benefit (adjusted to an actuarially
equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity
or qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the
plan assuming:
(i) the Participant will continue employment
until Normal Retirement Age (or current age, if
later), and
(ii) the Participant's Compensation for the
current Limitation Year and all other relevant
factors used to determine benefits under the Plan
will remain constant for all future Limitation
Years.
(g) Regional Prototype Plan means a plan the form of
which has been the subject of a favorable notification
letter from the Internal Revenue Service.
(h) Notwithstanding anything contained in this Section
to the contrary, the limitations, adjustments and other
requirements prescribed in this Section shall at all times
comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's annual
Compensation, or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the "annual
additions" under this Plan would cause the maximum provided
in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with Section 4.4(a)(4).
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with
the consent of the Administrator, mounts may be transferred
from other qualified plans, provided that the trust from
which such funds are transferred permits the transfer to be
made and the transfer will not jeopardize the tax exempt
status of the Plan or create adverse tax consequences for
the Employer. The mounts transferred shall be set up in a
separate account herein referred to as a "Participant's
Rollover Account". Such account shall be fully Vested at
all times and shall not be subject to forfeiture for any
reason.
(b) Amounts in a Participant's Rollover Account shall
be held by the Trustee pursuant to the provisions of this
Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1 (g)(4)), including amounts
treated as elective contributions, which are transferred
from another qualified plan in a plan-to-plan transfer shall
be subject to the distribution limitations provided for in
Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when
the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Participant's
Rollover Account shall be used to provide additional
benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover
Account shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant consent may be
made.
(e) The Administrator may direct that employee
transfers made after a valuation date be segregated into a
separate account for each Participant until such time as the
allocations pursuant to this Plan have been made, at which
time they may remain segregated or be invested as part of
the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section
401(a). The term "mounts transferred from other qualified
plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) lump-sum
distributions received by an Employee from another qualified
plan which are eligible for tax free rollover to a qualified
plan and which are transferred by the Employee to this Plan
within sixty (60) days following his receipt thereof; (iii)
amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual
retirement account has no assets other than assets which (A)
were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible
for tax-free rollover to a qualified plan and (C) were
deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account
meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60)
days of his receipt thereof from such conduit individual
retirement account.
(g) Prior to accepting any transfers to which this
Section applies, the Administrator may require the Employee
to establish that the amounts to be transferred to this Plan
meet the requirements of this Section and may also require
the Employee to provide an opinion of counsel satisfactory
to the Employer that the amounts to be transferred meet the
requirements of this Section.
(h) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan
(or a transaction having the effect of such a transfer)
shall only be permitted if it will not result in the
elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 8.1.
4.7 VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had
previously allowed voluntary Employee contributions, then,
except as provided in 4.7(b) below, this Plan will not
accept voluntary Employee contributions for Plan Years
beginning after the Plan Year in which this Plan is adopted
by the Employer.
(b) For 401(k) Plans, if elected in the Adoption
Agreement, each Participant may, at the discretion of the
Administrator in a nondiscriminatory manner, elect to
voluntarily contribute a portion of his compensation earned
while a Participant under this Plan. Such contributions
shall be paid to the Trustee within a reasonable period of
time but in no event later than 90 days after the receipt of
the contribution.
(c) The balance in each Participant's Voluntary
Contribution Account shall be fully Vested at all times and
shall not be subject to Forfeiture for any reason.
(d) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and
the actual earnings thereon in a manner which is consistent
with and satisfies the provisions of Section 6.5, including,
but not limited to, all notice and consent requirement of
Code Sections 411(a)(11) and 417 and the Regulations
thereunder. If the Administrator maintains sub-accounts
with respect to voluntary contributions (and earnings
thereon) which were made on or before a specified date, a
Participant shall be permitted to designate which sub-
account shall be the source for his withdrawal. No
Forfeitures shall occur solely as a result of an Employee's
withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the event
a Participant has received a hardship distribution pursuant
to Regulation 1.401(k)-1(d)(2)(iii)(B) from any plan
maintained by the Employer, then such Participant shall be
barred from making any voluntary contributions for a period
of twelve (12) months after receipt of the withdrawal or
distribution.
(e) At Normal Retirement Date, or such other date when
the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Voluntary
Contribution Account shall be used to provide additional
benefits to the Participant or his Beneficiary.
(f) The Administrator may direct that voluntary
contributions made after a valuation date be segregated into
a separate account until such time as the allocations
pursuant to this Plan have been made, at which time they may
remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
4.8 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all
Participants may direct the Trustee as to the investment of
all or a portion of any one or more of their individual
account balances. Participants may direct the Trustee in
writing to invest their account in specific assets as
permitted by the Administrator provided such investments are
in accordance with the Department of Labor regulations and
are permitted by the Plan. That portion of the account of
any Participant so directing will thereupon be considered a
Directed Investment Account.
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an
investment. Transfers between the Participant's regular
account and their Directed Investment Account shall be
charged and credited as the case may be to each account.
The Directed Investment Account shall not share in Trust
Fund Earnings, but it shall be charged or credited as
appropriate with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in
market value during each Plan Year attributable to such
account.
(c) The Administrator shall establish a procedure, to
be applied in a uniform and nondiscriminatory manner,
setting forth the permissible investment options under this
Section, how often changes between investments may be made,
and any other limitations that the Administrator shall
impose on a Participant's right to direct investments.
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously
permitted deductible voluntary contributions, then each
Participant who made a "Qualified Voluntary Employee
Contribution" within the meaning of Code Section 219(e)(2)
as it existed prior to the enactment of the Tax Reform Act
of 1986, shall have his contribution held in a separate
Qualified Voluntary Employee Contribution Account which
shall be fully Vested at all times. Such contributions,
however, shall not be permitted if they are attributable to
taxable years beginning after December 31, 1986.
(b) A Participant may, upon written request delivered
to the Administrator, make withdrawals from his Qualified
Voluntary Employee Contribution Account. Any distribution
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when
the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Qualified
Voluntary Employee Contribution Account shall be used to
provide additional benefits to the Participant or his
Beneficiary.
(d) Unless the Administrator directs Qualified
Voluntary Employee Contributions made pursuant to this
Section be segregated into a separate account for each
Participant, they shall be invested as part of the general
Trust Fund and share in earnings and losses.
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or
mandatory Employee contributions, then, with respect to Plan
Years beginning after December 31, 1986, such contributions must
satisfy the provisions of Code Section 401(m) and the Regulations
thereunder.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer maintains two or more standardized paired
plans, only one plan may be integrated with Social Security. If
the Employer and/or an Affiliated Employer maintain any other
combination qualified retirement plans integrated with Social
Security such that any Participant in this Plan is covered under
more than one of such plans, then such plans will be considered
to be one plan and the sum of the Defined Benefit excess plan
integration fraction, the Defined Benefit offset plan integration
fraction and the Defined Contribution plan integration fraction
as defined herein may not exceed 1 for the Plan Year with respect
to any Employee.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed
necessary by the Administrator, herein called "valuation date",
to determine the net worth of the assets comprising the Trust
Fund as it exists on the "valuation date". In determining such
net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date"
and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in
the Trust Fund which are listed on a registered stock exchange,
the Administrator shall direct the Trustee to value the same at
the prices they were last traded on such exchange preceding the
close of business on the "valuation date". If such securities
were not traded on the "valuation date", or if the exchange on
which they are traded was not open for business on the "valuation
date", then the securities shall be valued at the prices at which
they were last traded prior to the "valuation date". Any
unlisted security held in the Trust Fund shall be valued at its
bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker
or an investment banker. In determining the fair market value of
assets other than securities for which trading or bid prices can
be obtained, the Trustee may appraise such assets itself, or in
its discretion, employ one or more appraisers for that purpose
and rely on the values established by such appraiser or
appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on or after his
Normal Retirement Date or Early Retirement Date. Upon such
Normal Retirement Date or Early Retirement Date, all amounts
credited to such Participant's Combined Account shall become
distributable. However, a Participant may postpone the
termination of his employment with the Employer to a later date,
in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section
4.3, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is
practicable, the Administrator shall direct the distribution of
all mounts credited to such Participant's Combined Account in
accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account
shall become fully Vested. The Administrator shall direct,
in accordance with the provisions of Sections 6.6 and 6.7,
the distribution of the deceased Participant's accounts to
the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct, in accordance with the
provisions of Sections 6.6 and 6.7, the distribution of any
remaining amounts credited to the accounts of such deceased
Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of
death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death
and of the right of any person to receive payment shall be
conclusive.
(d) Unless otherwise elected in the manner prescribed
in Section 6.6, the Beneficiary of the Pre-Retirement
Survivor Annuity shall be the Participant's spouse. Except,
however, the Participant may designate a Beneficiary other
than his spouse for the Pre-Retirement Survivor Annuity if:
(1) the Participant and his spouse have validly waived
the Pre-Retirement Survivor Annuity in the manner
prescribed in Section 6.6, and the spouse has waived
his or her right to be the Participant's Beneficiary,
or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there
is no "qualified domestic relations order" as defined
in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A
Participant may at any time revoke his designation of a
Beneficiary or change his Beneficiary by filing written
notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in
writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit
consent only to a specific Beneficiary and that the spouse
voluntarily elected to relinquish such right. The
Participant may, at any time, designate a Beneficiary for
death benefits payable under the Plan that are in excess of
the Pre-Retirement Survivor Annuity. In the event no valid
designation of Beneficiary exists at the time of the
Participant's death, the death benefit shall be payable to
his estate.
(e) If the Plan provides an insured death benefit and
a Participant dies before any insurance coverage to which he
is entitled under the Plan is effected, his death benefit
from such insurance coverage shall be limited to the
standard rated premium which was or should have been used
for such purpose.
(f) In the event of any conflict between the terms of
this Plan and the terms of any Contract issued hereunder,
the Plan provisions shall control.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent
Disability prior to his Retirement Date or other termination of
his employment, all amounts credited to such Participant's
Combined Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Administrator,
in accordance with the provisions of Sections 6.5 and 6.7, shall
direct the distribution to such Participant of all amounts
credited to such Participant's Combined Account as though he had
retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date or other
valuation date, coinciding with or subsequent to the
termination Of a Participant's employment for any reason
other than retirement, death, or Total and Permanent
Disability, the Administrator may direct that the amount of
the Vested portion of such Terminated Participant's Combined
Account be segregated and invested separately. In the event
the Vested portion of a Participant's Combined Account is
not segregated, the amount shall remain in a separate
account for the Terminated Participant and share in
allocations pursuant to Section 4.3 until such time as a
distribution is made to the Terminated Participant. The
amount of the portion of the Participant's Combined Account
which is not Vested may be credited to a separate account
(which will always share in gains and losses of the Trust
Fund) and at such time as the amount becomes a Forfeiture
shall be treated in accordance with the provisions of the
Plan regarding Forfeitures.
Regardless of whether distributions in kind are
permitted, in the event that the amount of the Vested
portion of the Terminated Participant's Combined Account
equals or exceeds the fair market value of any insurance
Contracts, the Trustee, when so directed by the
Administrator and agreed to by the Terminated Participant,
shall assign, transfer, and set over to such Terminated
Participant all Contracts on his life in such form or with
such endorsements, so that the settlement options and forms
of payment are consistent with the provisions of Section
6.5. In the event that the Terminated Participant's Vested
portion does not at least equal the fair market value of the
Contracts, if any, the Terminated Participant may pay over
to the Trustee the sum needed to make the distribution equal
to the value of the Contracts being assigned or transferred,
or the Trustee, pursuant to the Participant's election, may
borrow the cash value of the Contracts from the Insurer so
that the value of the Contracts is equal to the Vested
portion of the Terminated Participant's Combined Account and
then assign the Contracts to the Terminated Participant.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event
which would result in the distribution had the Terminated
Participant remained in the employ of the Employer (upon the
Participant's death, Total and Permanent Disability, Early
or Normal Retirement). However, at the election of the
Participant, the Administrator shall direct that the entire
Vested portion of the Terminated Participant's Combined
Account to be payable to such Terminated Participant
provided the conditions, if any, set forth in the Adoption
Agreement have been satisfied. Any distribution under this
paragraph shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including but
not limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Regulations thereunder.
Notwithstanding the above, if the value of a Terminated
Participant's Vested benefit derived from Employer and
Employee contributions does not exceed, and at the time of
any prior distribution, has never exceeded $3,500, the
Administrator shall direct that the entire Vested benefit be
paid to such Participant in a single lump-sum without regard
to the consent of the Participant or the Participant's
spouse. A Participant's Vested benefit shall not include
Qualified Voluntary Employee Contributions within the
meaning of Code Section 72(o)(5)(B) for Plan Years beginning
prior to January 1, 1989.
(b) The Vested portion of any Participant's Account
shall be a percentage of such Participant's Account
determined on the basis of the Participant's number of Years
of Service according to the vesting schedule specified in
the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum
top heavy vesting schedules as elected by the Employer in
the Adoption Agreement will automatically apply to the Plan.
The minimum top heavy vesting schedule applies to all
benefits within the meaning of Code Section 411(a)(7) except
those attributable to Employee contributions, including
benefits accrued before the effective date of Code Section
416 and benefits accrued before the Plan became top heavy.
Further, no decrease in a Participant's Vested percentage
may occur in the event the Plan's status as top heavy
changes for any Plan Year. However, this Section does not
apply to the account balances of any Employee who does not
have an Hour of Service after the Plan has initially become
top heavy and the Vested percentage of such Employee's
Participant's Account shall be determined without regard to
this Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a
Top Heavy Plan, the Administrator shall continue to use the
vesting schedule in effect while the Plan was a Top Heavy
Plan for each Employee who had an Hour of Service during a
Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon
the complete discontinuance of the Employer's contributions
to the Plan or upon any full or partial termination of the
Plan, all amounts credited to the account of any affected
Participant shall become 100% Vested and shall not
thereafter be subject to Forfeiture.
(e) If this is an amended or restated Plan, then
notwithstanding the vesting schedule specified in the
Adoption Agreement, the Vested percentage of a Participant's
Account shall not be less than the Vested percentage
attained as of the later of the effective date or adoption
date of this amendment and restatement. The computation of
a Participant's nonforfeitable percentage of his interest in
the Plan shall not be reduced as the result of any direct or
indirect amendment to this Article, or due to changes in the
Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if
the Plan is amended in any way that directly or indirectly
affects the computation of the Participant's nonforfeitable
percentage or if the Plan is deemed amended by an automatic
change to a top heavy vesting schedule, then each
Participant with at least 3 Years of Service as of the
expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without
regard to such amendment or change. Notwithstanding the
foregoing, for Plan Years beginning before January 1, 1989,
or with respect to Employees who fail to complete at least
one (1) Hour of Service in a Plan Year beginning after
December 31, 1988, five (5) shall be substituted for three
(3) in the preceding sentence, if a Participant falls to
make such election, then such Participant shall be subject
to the new vesting schedule. The Participant's election
period shall commence on the adoption date of the amendment
and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice
of the amendment from the Employer or Administrator.
(g)(1) If any Former Participant shall be reemployed
by the Employer before a 1-Year Break in Service occurs, he
shall continue to participate in the Plan in the same manner
as if such termination had not occurred.
(2) If any Former Participant shall be re-employed by
the Employer before five (5) consecutive 1-Year Breaks
in Service, and such Former Participant had received a
distribution of his entire Vested interest prior to his
reemployment, his forfeited account shall be reinstated
only if he repays the full amount distributed to him
before the earlier of five (5) years after the first
date on which the Participant is subsequently
reemployed by the Employer or the close of the first
period of 5 consecutive 1-Year Breaks in Service
commencing after the distribution. If a distribution
occurs for any reason other than a separation from
service, the time for repayment may not end earlier
than five (5) years after the date of separation. In
the event the Former Participant does repay the full
amount distributed to him, the undistributed portion of
the Participant's Account must be restored in full,
unadjusted by any gains or losses occurring subsequent
to the Anniversary Date or other valuation date
preceding his termination. If an employee receives a
distribution pursuant to this section and the employee
resumes employment covered under this plan, the
employee's employer-derived account balance will be
restored to the amount on the date of distribution if
the employee repays to the plan the full amount of the
distribution attributable to employer contributions
before the earlier of 5 years after the first date on
which the participant is subsequently re-employed by
the employer, or the date the participant incurs 5
consecutive 1-year breaks in service following the date
of the distribution. If a non-Vested Former
Participant was deemed to have received a distribution
and such Former Participant is reemployed by the
Employer before five (5) consecutive 1-Year Breaks in
Service, then such Participant will be deemed to have
repaid the deemed distribution as of the date of
reemployment.
(3) If any Former Participant is reemployed after a 1-
Year Break in Service has occurred, Years of Service
shall include Years of Service prior to his 1-Year
Break in Service subject to the following rules:
(i) Any Former Participant who under the Plan
does not have a nonforfeitable right to any
interest in the Plan resulting from Employer
contributions shall lose credits if his
consecutive 1-Year Breaks in Service equal or
exceed the greater of (A) five (5) or (B) the
aggregate number of his pre-break Years of
Service;
(ii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account
balance attributable to pre-break service shall
not be increased as a result of post-break
service;
(iii) A Former Participant who is reemployed
and who has not had his Years of Service before a
1-Year Break in Service disregarded pursuant to
(i) above, shall participate in the Plan as of his
date of reemployment;
(iv) If a Former Participant completes a Year of
Service (a 1-Year Break in Service previously
occurred, but employment had not terminated), he
shall participate in the Plan retroactively from
the first day of the Plan Year during which he
completes one (1) Year of Service.
(h) In determining Years of Service for purposes of
vesting under the Plan, Years of Service shall be excluded
as specified in the Adoption Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting date"
and who does not die before the "annuity starting date"
shall receive the value of all of his benefits in the form
of a Joint and Survivor Annuity. The Joint and Survivor
Annuity is an annuity that commences immediately and shall
be equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall
continue to the spouse during the spouse's lifetime at a
rate equal to 50% of the rate at which such benefits were
payable to the Participant. This Joint and Survivor Annuity
shall be considered the designated qualified Joint and
Survivor Annuity and automatic form of payment for the
purposes of this Plan. However, the Participant may elect
to receive a smaller annuity benefit with continuation of
payments to the spouse at a rate of seventy-five percent
(75%) or one hundred percent (100%) of the rate payable to a
Participant during his lifetime which alternative Joint and
Survivor Annuity shall be equal in value to the automatic
Joint and 50% Survivor Annuity. An unmarried Participant
shall receive the value of his benefit in the form of a life
annuity. Such married Participant, however, may elect in
writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an
election to waive the Joint and Survivor Annuity by a
married Participant, but without the spousal consent
requirement. The Participant may elect to have any annuity
provided for in this Section distributed upon the attainment
of the "earliest retirement age" under the Plan. The
"earliest retirement age" is the earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
(2) Any election to waive the Joint and Survivor
Annuity must be made by the Participant in writing
during the election period and be consented to by the
Participant's spouse, if the spouse is legally
incompetent to give consent, the spouse's legal
guardian, even if such guardian is the Participant, may
give consent. Such election shall designate a
Beneficiary (or a form of benefits) that may not be
changed without spousal consent (unless the consent of
the spouse expressly permits designations by the
Participant without the requirement of further consent
by the spouse). Such spouse's consent shall be
irrevocable and must acknowledge the effect of such
election and be witnessed by a Plan representative or a
notary public. Such consent shall not be required if
it is established to the satisfaction of the
Administrator that the required consent cannot be
obtained because there is no spouse, the spouse cannot
be located, or other circumstances that may be
prescribed by Regulations. The election made by the
Participant and consented to by his spouse may be
revoked by the Participant in writing without the
consent of the spouse at any time during the election
period. The number of revocations shall not be
limited. Any new election must comply with the
requirements of this paragraph. A former spouse's
waiver shall not be binding on a new spouse.
(3) The election period to waive the Joint and
Survivor Annuity shall be the 90 day period ending on
the "annuity starting date."
(4) For purposes of this Section and Section 6.6, the
"annuity starting date" means the first day of the
first period for which an amount is paid as an annuity,
or, in the case of a benefit not payable in the form of
an annuity, the first day on which all events have
occurred which entitles the Participant to such
benefit.
(5) With regard to the election, the Administrator
shall provide to the Participant no less than 30 days
and no more than 90 days before the "annuity starting
date" a written explanation of:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the
effect of an election to waive the Joint and
Survivor Annuity, and
(iii) the right of the Participant's spouse to
consent to any election to waive the Joint and
Survivor Annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(b) In the event a married Participant duly elects
pursuant to paragraph (a)(2) above not to receive his
benefit in the form of a Joint and Survivor Annuity, or if
such Participant is not married, in the form of a life
annuity, the Administrator, pursuant to the election of the
Participant, shall direct the distribution to a Participant
or his Beneficiary any amount to which he is entitled under
the Plan in one or more of the following methods which are
permitted pursuant to the Adoption Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments. In
order to provide such installment payments, the
Administrator may direct that the Participant's
interest in the Plan be segregated and invested
separately, and that the funds in the segregated
account be used for the payment of the installments.
The period over which such payment is to be made shall
not extend beyond the Participant's life expectancy (or
the life expectancy of the Participant and his
designated Beneficiary);
(3) Purchase of or providing an annuity. However,
such annuity may not be in any form that will provide
for payments over a period extending beyond either the
life of the Participant (or the lives of the
Participant and his designated Beneficiary) or the life
expectancy of the Participant (or the life expectancy
of the Participant and his designated Beneficiary).
(c) The present value of a Participant's Joint and
Survivor Annuity derived from Employer and Employee
contributions may not be paid without his written consent if
the value exceeds, or has ever exceeded at the time of any
prior distribution, $3,500. Further, the spouse of a
Participant must consent in writing to any immediate
distribution. If the value of the Participant's benefit
derived from Employer and Employee contributions does not
exceed $3,500 and has never exceeded $3,500 at the time of
any prior distribution, the Administrator may immediately
distribute such benefit without such Participant's consent.
No distribution may be made under the preceding sentence
after the "annuity starting date" unless the Participant and
his spouse consent in writing to such distribution. Any
written consent required under this paragraph must be
obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with
Section 6.5(a)(2).
(d) Any distribution to a Participant who has a
benefit which exceeds, or has ever exceeded at the time of
any prior distribution, $3,500 shall require such
Participant's consent if such distribution commences prior
to the later of his Normal Retirement Age or age 62. With
regard to this required consent:
(1) No consent shall be valid unless the Participant
has received a general description of the material
features and an explanation of the relative values of
the optional forms of benefit available under the Plan
that would satisfy the notice requirements of Code
Section 417.
(2) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are
required under Section 6.5(e).
(3) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no
more than 90 days before the "annuity starting date".
(4) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than 90
days before the "annuity starting date".
(5) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant
who does not consent to the distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits, made
on or after January 1, 1985, whether under the Plan or
through the purchase of an annuity Contract, shall be made
in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation Section
1.401(a)(9)-2), the provisions of which are incorporated
herein by reference:
(1) A Participant's benefits shall be distributed to
him not later than April 1st of the calendar year
following the later of (i) the calendar year in which
the Participant attains age 70 1/2 or
(ii) the calendar year in which the Participant
retires, provided, however, that this clause (ii) shall
not apply in the case of a Participant who is a "five
(5) percent owner" at any time during the five (5) Plan
Year period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant who
becomes a "five (5) percent owner" during any
subsequent Plan Year, clause (ii) shall no longer apply
and the required beginning date shall be the April 1st
of the calendar year following the calendar year in
which such subsequent Plan Year ends. Alternatively,
distributions to a Participant must begin no later than
the applicable April 1st as determined under the
preceding sentence and must be made over the life of
the Participant (or the lives of the Participant and
the Participant's designated Beneficiary) or, if
benefits are paid in the form of a Joint and Survivor
Annuity, the life expectancy of the Participant (or the
life expectancies of the Participant and his designated
Beneficiary) in accordance with Regulations. For Plan
Years beginning after December 31, 1988, clause (ii)
above shall not apply to any Participant unless the
Participant had attained age 70 1/2 before January 1,
1988 and was not a "five (5) percent owner" at any time
during the Plan Year ending with or within the calendar
year in which the Participant attained age 66 1/2 or
any subsequent Plan Year.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative
method which provides that the then present value of
the payments to be made over the period of the
Participant's life expectancy exceeds fifty percent
(50%) of the then present value of the total payments
to be made to the Participant and his Beneficiaries.
(f) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse (other than in
the case of a life annuity) shall be redetermined annually
in accordance with Regulations if permitted pursuant to the
Adoption Agreement. If the Participant or the Participant's
spouse may elect whether recalculations will be made, then
the election, once made, shall be irrevocable. If no
election is made by the time distributions must commence,
then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation.
Life expectancy and joint and last survivor expectancy shall
be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-
transferable when distributed. Furthermore, the terms of
any annuity Contract purchased and distributed to a
Participant or spouse shall comply with all of the
requirements of this Plan.
(h) Subject to the spouse' s right of consent afforded
under the Plan, the restrictions imposed by this Section
shall not apply if a Participant has, prior to January 1,
1984, made a written designation to have his retirement
benefit paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the
Tax Equity and Fiscal Responsibility Act of 1982.
(i) If a distribution is made at a time when a
Participant who has not terminated employment is not fully
Vested in his Participant's Account and the Participant may
increase the Vested percentage in such account:
(1) A separate account shall be established for the
Participant's interest in the Plan as of the time of
the distribution, and
(2) At any relevant time the Participant's Vested
portion of the separate account shall be equal to an
amount ("X") determined by the formula:
X equals P(AB plus (RxD)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account
balance at the relevant time, D is the amount of
distribution, and R is the ratio of the account balance
at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a
Vested Participant who dies before the annuity starting date
and who has a surviving spouse shall have the Pre-Retirement
Survivor Annuity paid to his surviving spouse. The
Participant's spouse may direct that payment of the Pre-
Retirement Survivor Annuity commence within a reasonable
period after the Participant' s death. If the spouse does
not so direct, payment of such benefit will commence at the
time the Participant would have attained the later of his
Normal Retirement Age or age 62. However, the spouse may
elect a later commencement date. Any distribution to the
Participant's spouse shall be subject to the rules specified
in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the
Participant in writing during the election period and shall
require the spouse's irrevocable consent in the same manner
provided for in Section 6.5(a)(2). Further, the spouse's
consent must acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary
need not be acknowledged, provided the consent of the spouse
acknowledges that the spouse has the right to limit consent
only to a specific Beneficiary and that the spouse
voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan
Year in which the Participant attains age 35 and end on the
date of the Participant's death. An earlier waiver (with
spousal consent) may be made provided a written explanation
of the Pre-Retirement Survivor Annuity is given to the
Participant and such waiver becomes invalid at the beginning
of the Plan Year in which the Participant turns age 35. In
the event a Vested Participant separates from service prior
to the beginning of the election period, the election period
shall begin on the date of such separation from service.
(d) With regard to the election, the Administrator
shall provide each Participant within the applicable period,
with respect to such Participant (and consistent with
Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that
required pursuant to Section 6.5(a)(5). For the purposes of
this paragraph, the term "applicable period" means, with
respect to a Participant, whichever of the following periods
ends last:
(1) The period beginning with the first day of the
Plan Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an
individual who becomes a Participant after age 32, the
explanation must be provided by the end of the three-
year period beginning with the first day of the first
Plan Year for which the individual is a Participant;
(3) A reasonable period ending after the Plan no
longer fully subsidizes the cost of the Pre-Retirement
Survivor Annuity with respect to the Participant;
(4) A reasonable period ending after Code Section
401(a)(11) applies to the Participant; or
(5) A reasonable period after separation from service
in the case of a Participant who separates before
attaining age 35. For this purpose, the Administrator
must provide the explanation beginning one year before
the separation from service and ending one year after
separation.
(e) The Pre-Retirement Survivor Annuity provided for
in this Section shall apply only to Participants who are
credited with an Hour of Service on or after August 23,
1984. Former Participants who are not credited with an Hour
of Service on or after August 23, 1984 shall be provided
with rights to the Pre-Retirement Survivor Annuity in
accordance with Section 303(e)(2) of the Retirement Equity
Act of 1984.
(f) If the value of the Pre-Retirement Survivor
Annuity derived from Employer and Employee contributions
does not exceed $3,500 and has never exceeded $3,500 at the
time of any prior distribution, the Administrator shall
direct the immediate distribution of such amount to the
Participant's spouse. No distribution may be made under the
preceding sentence after the annuity starting date unless
the spouse consents in writing. If the value exceeds, or
has ever exceeded at the time of any prior distribution,
$3500, an immediate distribution of the entire amount may be
made to the surviving spouse, provided such surviving spouse
consents in writing to such distribution. Any written
consent required under this paragraph must be obtained not
more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section
6.5(a)(2).
(g)(1) In the event there is an election to waive
the Pre-Retirement Survivor Annuity, and for death benefits
in excess of the Pre-Retirement Survivor Annuity, such death
benefits shall be paid to the Participant's Beneficiary by
either of the following methods, as elected by the
Participant (or if no election has been made prior to the
Participant's death, by his Beneficiary) subject to the
rules specified in Section 6.6(h) and the selections made in
the Adoption Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual,
or annual cash installments over a period to be
determined by the Participant or his Beneficiary.
After periodic installments commence, the
Beneficiary shall have the right to reduce the
period over which such periodic installments shall
be made, and the cash amount of such periodic
installments shall be adjusted accordingly.
(iii) If death benefits in excess of the Pre-
Retirement Survivor Annuity are to be paid to the
surviving spouse, such benefits may be paid
pursuant to (i) or (ii) above, or used to purchase
an annuity so as to increase the payments made
pursuant to the Pre-Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to
Section 6.2 is payable in installments, then, upon the
death of the Participant, the Administrator may direct
that the death benefit be segregated and invested
separately, and that the funds accumulated in the
segregated account be used for the payment of the
installments.
(h) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant made
on or after January 1, 1985, shall be made in accordance
with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder.
(1) If it is determined, pursuant to Regulations, that
the distribution of a Participant's interest has begun
and the Participant dies before his entire interest has
been distributed to him, the remaining portion of such
interest shall be distributed at least as rapidly as
under the method of distribution selected pursuant to
Section 6.5 as of his date of death.
(2) If a Participant dies before he has begun to
receive any distributions of his interest in the Plan
or before distributions are deemed to have begun
pursuant to Regulations, then his death benefit shall
be distributed to his Beneficiaries in accordance with
the following rules subject to the selections made in
the Adoption Agreement and Subsections 6.6(h)(3) and
6.6(i) below:
(i) The entire death benefit shall be distributed
to the Participant's Beneficiaries by December
31st of the calendar year in which the fifth
anniversary of the Participant's death occurs;
(ii) The 5-year distribution requirement of (i)
above shall not apply to any portion of the
deceased Participant's interest which is payable
to or for the benefit of a designated Beneficiary.
In such event, such portion shall be distributed
over the life of such designated Beneficiary (or
over a period not extending beyond the life
expectancy of such designated Beneficiary)
provided such distribution begins not later than
December 31st of the calendar year immediately
following the calendar year in which the
Participant died;
(iii) However, in the event the Participant's
spouse (determined as of the date of the
Participant's death) is his designated
Beneficiary, the provisions of (ii) above shall
apply except that the requirement that
distributions commence within one year of the
Participant's death shall not apply. In lieu
thereof, distributions must commence on or before
the later of: (1) December 31st of the calendar
year immediately following the calendar year in
which the Participant died; or (2) December 31st
of the calendar year in which the Participant
would have attained age 70 1/2. If the surviving
spouse dies before distributions to such spouse
begin, then the 5-year distribution requirement of
this Section shall apply as if the spouse was the
Participant.
(3) Notwithstanding subparagraph (2) above, or any
selections made in the Adoption Agreement, if a
Participant's death benefits are to be paid in the form
of a Pre-Retirement Survivor Annuity, then
distributions to the Participant's surviving spouse
must commence on or before the later of: (1) December
31st of the calendar year immediately following the
calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the
Participant would have attained age 70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by
a designated Beneficiary to be excepted from the 5-year
distribution requirement (if permitted in the Adoption
Agreement) must be made no later than December 31st of the
calendar year following the calendar year of the
Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving
spouse, the election must be made by the earlier of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died or, if later,
the calendar year in which the Participant would have
attained age 70 1/2; or (2) December 31st of the calendar
year which contains the fifth anniversary of the date of the
Participant's death. An election by a designated
Beneficiary must be in writing and shall be irrevocable as
of the last day of the election period stated herein. In
the absence of an election by the Participant or a
designated Beneficiary, the 5-year distribution requirement
shall apply.
(j) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse (other than in
the case of a life annuity) shall or shall not be
redetermined annually as provided in the Adoption Agreement
and in accordance with Regulations. If the Participant or
the Participant's spouse may elect, pursuant to the Adoption
Agreement, to have life expectancies recalculated, then the
election, once made shall be irrevocable. If no election is
made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse
shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation
Section 1.72-9.
(k) In the event that less than 100% of a
Participant's interest in the Plan is distributed to such
Participant's spouse, the portion of the distribution
attributable to the Participant's Voluntary Contribution
Account shall be in the same proportion that the
Participant's Voluntary Contribution Account bears to the
Participant's total interest in the Plan.
(1) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section
shall not apply if a Participant has, prior to January 1,
1984, made a written designation to have his death benefits
paid in an alternative method acceptable under Code Section
401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a
distribution is to be made, or a series of payments are to
commence, on or as of an Anniversary Date, the distribution or
series of payments may be made or begun on such date or as soon
thereafter as is practicable, but in no event later than 180 days
after the Anniversary Date. However, unless a Former Participant
elects in writing to defer the receipt of benefits (such election
may not result in a death benefit that is more than incidental),
the payment of benefits shall begin not later than the 60th day
after the close of the Plan Year in which the latest of the
following events occurs: (a) the date on which the Participant
attains the earlier of age 65 or the Normal Retirement Age
specified herein; (b) the 10th anniversary of the year in which
the Participant commenced participation in the Plan; or (c) the
date the Participant terminates his service with the Employer.
Notwithstanding the foregoing, the failure of a Participant
and, if applicable, the Participant's spouse, to consent to a
distribution pursuant to Section 6.5(d), shall be deemed to be an
election to defer the commencement of payment of any benefit
sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then
the Administrator may direct that such distribution be paid to
the legal guardian, or if none, to a parent of such Beneficiary
or a responsible adult with whom the Beneficiary maintains his
residence, or to the custodian for such Beneficiary under the
Uniform Gift to Minors Act or Gift to Minors Act, if such is
permitted by the laws of the state in which said Beneficiary
resides. Such a payment to the legal guardian, custodian or
parent of a minor Beneficiary shall fully discharge the Trustee,
Employer, and Plan from further liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at
the later of the Participant's attainment of age 62 or his Normal
Retirement Age, remain unpaid solely by reason of the inability
of the Administrator, after sending a registered letter, return
receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated
as a Forfeiture pursuant to the Plan. In the event a Participant
or Beneficiary is located subsequent to his benefit being
reallocated, such benefit shall be restored, first from
Forfeitures, if any, and then from an additional Employer
contribution if necessary.
6.10 PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if
elected in the Adoption Agreement, at such time as a Participant
shall have attained the age specified in the Adoption Agreement,
the Administrator, at the election of the Participant, shall
direct the distribution of up to the entire amount then credited
to the accounts maintained on behalf of the Participant.
However, no such distribution from the Participant's Account
shall occur prior to 100% Vesting. In the event that the
Administrator makes such a distribution, the Participant shall
continue to be eligible to participate in the Plan on the same
basis as any other Employee. Any distribution made pursuant to
this Section shall be made in a manner consistent with Section
6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11)and 417 and the
Regulations thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the
Adoption Agreement, the Administrator, at the election of
the Participant, shall direct the distribution to any
Participant in any one Plan Year up to the lesser of 100% of
his Participant's Combined Account valued as of the last
Anniversary Date or other valuation date or the amount
necessary to satisfy the immediate and heavy financial need
of the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day of
the Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the account from
which the distribution is made shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if
the distribution is on account of:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of his
dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition for the next semester or
quarter of post-secondary education for the
Participant, his spouse, children, or dependents; or
(5) The need to prevent the eviction of the
Participant from his principal residence or foreclosure
on the mortgage of the Participant's principal
residence.
(b) No such distribution shall be made from the
Participant's Account until such Account has become fully
Vested.
(c) Any distribution made pursuant to this Section
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Regulations thereunder.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded
to any "alternate payee" under a "qualified domestic relations
order." Furthermore, a distribution to an "alternate payee"
shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected
Participant has not reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee,"
"qualified domestic relations order" and "earliest retirement
age" shall have the meaning set forth under Code Section 414(p).
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall
apply to a Participant in a Profit Sharing Plan or 401(k) Profit
Sharing Plan and to any distribution, made on or after the first
day of the first plan year beginning after December 31, 1988,
from or under a separate account attributable solely to
accumulated deductible employee contributions, as defined in Code
Section 72(o)(5)(B), and maintained on behalf of a participant in
a money purchase pension plan, (including a target benefit plan):
(a) The Participant shall be prohibited from electing
benefits in the form of a life annuity;
(b) Upon the death of the Participant, the
Participant's entire Vested account balances will be paid to
his or her surviving spouse, or, if there is no surviving
spouse or the surviving spouse has already consented to
waive his or her benefit, in accordance with Section 6.6, to
his designated Beneficiary; and
(c) Except to the extent otherwise provided in this
Section and Section 6.5(h), the other provisions of Sections
6.2, 6.5 and 6.6 regarding spousal consent and the forms of
distributions shall be inoperative with respect to this
Plan.
This Section shall not apply to any Participant if it is
determined that this Plan is a direct or indirect transferee of a
defined benefit plan or money purchase plan, or a target benefit
plan, stock bonus or profit sharing plan which would otherwise
provide for a life annuity form of payment to the Participant.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and method"
determined by the Employer to invest, manage, and control
the Plan assets subject, however, to the direction of an
Investment Manager if the Employer should appoint such
manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay
benefits required under the Plan to be paid to Participants,
or, in the event of their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements
and furnish to the Employer and/or Administrator for each
Plan Year a written annual report per Section 7.7; and
(d) If there shall be more than one Trustee, they
shall act by a majority of their number, but may authorize
one or more of them to sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust
Fund to keep the Trust Fund invested without distinction
between principal and income and in such securities or
property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to,
stocks, common or preferred, bonds and other evidences of
indebtedness or ownership, and real estate or any interest
therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors,
the short and long-term financial needs of the Plan on the
basis of information furnished by the Employer. In making
such investments, the Trustee shall not be restricted to
securities or other property of the character expressly
authorized by the applicable law for trust investments;
however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all
times this Plan may qualify as a qualified Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust
company shall be of a custodial, clerical and record-keeping
nature.
(c) The Trustee may from time to time transfer to a
common, collective, or pooled trust fund maintained by any
corporate Trustee hereunder pursuant to Revenue Ruling 81-
100, all or such part of the Trust Fund as the Trustee may
deem advisable, and such part or all of the Trust Fund so
transferred shall be subject to all the terms and provisions
of the common, collective, or pooled trust fund which
contemplate the commingling for investment purposes of such
trust assets with trust assets of other trusts. The Trustee
may withdraw from such common, collective, or pooled trust
fund all or such part of the Trust Fund as the Trustee may
deem advisable.
(d) The Trustee, at the direction of the Administrator
and pursuant to instructions from the individual designated
in the Adoption Agreement for such purpose and subject to
the conditions set forth in the Adoption Agreement, shall
ratably apply for, own, and pay all premiums on Contracts on
the lives of the Participants. Any initial or additional
Contract purchased on behalf of a Participant shall have a
face amount of not less than $1,000, the amount set forth in
the Adoption Agreement, or the limitation of the Insurer,
whichever is greater. If a life insurance Contract is to be
purchased for a Participant, the aggregate premium for
ordinary life insurance for each Participant must be less
than 50% of the aggregate contributions and Forfeitures
allocated to a Participant's Combined Account. For purposes
of this limitation, ordinary life insurance Contracts are
Contracts with both non-decreasing death benefits and non-
increasing premiums. If term insurance or universal life
insurance is purchased with such contributions, the
aggregate premium must be 25% or less of the aggregate
contributions and Forfeitures allocated to a Participant's
Combined Account. If both term insurance and ordinary life
insurance are purchased with such contributions, the amount
expended for term insurance plus one-half of the premium for
ordinary life insurance may not in the aggregate exceed 25%
of the aggregate Employer contributions and Forfeitures
allocated to a Participant's Combined Account. The Trustee
must distribute the Contracts to the Participant or convert
the entire value of the Contracts at or before retirement
into cash or provide for a periodic income so that no
portion of such value may be used to continue life insurance
protection beyond retirement. Notwithstanding the above,
the limitations imposed herein with respect to the purchase
of life insurance shall not apply, in the case of a Profit
Sharing Plan, to the portion of a Participant's Account that
has accumulated for at least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary,
amounts credited to a Participant's Qualified Voluntary
Employee Contribution Account pursuant to Section 4.9, shall
not be applied to the purchase of life insurance contracts.
(e) The Trustee will be the owner of any life
insurance Contract purchased under the terms of this Plan.
The Contract must provide that the proceeds will be payable
to the Trustee; however, the Trustee shall be required to
pay over all proceeds of the Contract to the Participant's
designated Beneficiary in accordance with the distribution
provisions of Article VI. A Participant's spouse will be
the designated Beneficiary pursuant to Section 6.2, unless a
qualified election has been made in accordance with Sections
6.5 and 6.6 of the Plan, if applicable. Under no
circumstances shall the Trust retain any part of the
proceeds. However, the Trustee shall not pay the proceeds
in a method that would violate the requirement of the
Retirement Equity Act, as stated in Article VI of the Plan,
or Code Section 401(a)(9) and the Regulations thereunder.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other
provisions of this Plan, shall have the following powers and
authorities to be exercised in the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or
other property and to retain the same. In conjunction with
the purchase of securities, margin accounts may be opened
and maintained;
(b) To sell, exchange, convey, transfer, grant options
to purchase, or otherwise dispose of any securities or other
property held by the Trustee, by private contract or at
public auction. No person dealing with the Trustee shall be
bound to see to the application of the purchase money or to
inquire into the validity, expediency, or propriety of any
such sale or other disposition, with or without
advertisement;
(c) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights or other
options, and to make any payments incidental thereto; to
oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one
or more of the Trustee's nominees, and to hold any
investments in bearer form, but the books and records of the
Trustee shall at all times show that all such investments
are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the
Plan in such amount, and upon such terms and conditions, as
the Trustee shall deem advisable; and for any sum so
borrowed, to issue a promissory note as Trustee, and to
secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the
Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or
propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or
cash balances as the Trustee may, from time to time, deem to
be in the best interests of the Plan, without liability for
interest thereon;
(g) To accept and retain for such time as it may deem
advisable any securities or other property received or
acquired by it as Trustee hereunder, whether or not such
securities or other property would normally be purchased as
investments hereunder;
(h) To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration
any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and
legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay
their reasonable expenses and compensation, and such agent
or counsel may or may not be agent or counsel for the
Employer;
(k) To apply for and procure from the Insurer as an
investment of the Trust Fund such annuity, or other
Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect,
receive, and settle for the proceeds of all such annuity, or
other Contracts as and when entitled to do so under the
provisions thereof;
(1) To invest funds of the Trust in time deposits or
savings accounts bearing a reasonable rate of interest in
the Trustee's bank;
(m) To invest in Treasury Bills and other forms of
United States government obligations;
(n) To sell, purchase and acquire put or call options
if the options are traded on and purchased through a
national securities exchange registered under the Securities
Exchange Act of 1934, as amended, or, if the options are not
traded on a national securities exchange, are guaranteed by
a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and
loan associations;
(p) To pool all or any of the Trust Fund, from time to
time, with assets belonging to any other qualified employee
pension benefit trust created by the Employer or any
Affiliated Employer, and to commingle such assets and make
joint or common investments and carry joint accounts on
behalf of this Plan and such other trust or trusts,
allocating undivided shares or interests in such investments
or accounts or any pooled assets of the two or more trusts
in accordance with their respective interests;
(q) To do all such acts and exercise all such rights
and privileges, although not specifically mentioned herein,
as the Trustee may deem necessary to carry out the purposes
of the Plan.
(r) Directed Investment Account. The powers granted
to the Trustee shall be exercised in the sole fiduciary
discretion of the Trustee. However, if elected in the
Adoption Agreement, each Participant may direct the Trustee
to separate and keep separate all or a portion of his
interest in the Plan; and further each Participant is
authorized and empowered, in his sole and absolute
discretion, to give directions to the Trustee in such form
as the Trustee may require concerning the investment of the
Participant's Directed Investment Account, which directions
must be followed by the Trustee subject, however, to
restrictions on payment of life insurance premiums. Neither
the Trustee nor any other persons including the
Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review
any securities or other property, real or personal, or to
make any suggestions to the Participant in connection
therewith, and the Trustee shall comply as promptly as
practicable with directions given by the Participant
hereunder. Any such direction may be of a continuing nature
or otherwise and may be revoked by the Participant at any
time in such form as the Trustee may require. The Trustee
may refuse to comply with any direction from the Participant
in the event the Trustee, in its sole and absolute
discretion, deems such directions improper by virtue of
applicable law, and in such event, the Trustee shall not be
responsible or liable for any loss or expense which may
result. Any costs and expenses related to compliance with
the Participant's directions shall be borne by the
Participant's Directed Investment Account.
Notwithstanding anything hereinabove to the contrary,
the Trustee shall not, at any time after December 31, 1981,
invest any portion of a Directed Investment Account in
"collectibles" within the meaning of that term as employed
in Code Section 408(m).
7.4 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the
Trustee (or, if loans are treated as Directed Investment
pursuant to the Adoption Agreement, the Administrator) may,
in the Trustee's (or, if applicable, the Administrator's)
sole discretion, make loans to Participants or Beneficiaries
under the following circumstances: (1) loans shall be made
available to all Participants and Beneficiaries on a
reasonably equivalent basis; (2) loans shall not be made
available to Highly Compensated Employees in an amount
greater than the amount made available to other
Participants; (3) loans shall bear a reasonable rate of
interest; (4) loans shall be adequately secured; and (5)
shall provide for periodic repayment over a reasonable
period of time.
(b) Loans shall not be made to any Shareholder-
Employee or Owner-Employee unless an exemption for such loan
is obtained pursuant to Act Section 408 and further provided
that such loan would not be subject to tax pursuant to Code
Section 4975.
(c) Loans shall not be granted to any Participant that
provide for a repayment period extending beyond such
Participant's Normal Retirement Date.
(d) Loans made pursuant to this Section (when added to
the outstanding balance of all other loans made by the Plan
to the Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to
the Participant during the one year period ending on
the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was
made, or
(2) the greater of (A) one-half (1/2) of the present
value of the non-forfeitable accrued benefit of the
Employee under the Plan, or (B), if permitted pursuant
to the Adoption Agreement, $10,000.
For purposes of this limit, all plans of the Employer
shall be considered one plan. Additionally, with respect to
any loan made prior to January 1, 1987, the $50,000 limit
specified in (1) above shall be unreduced.
(e) No Participant loan shall take into account the
present value of such Participant's Qualified Voluntary
Employee Contribution Account.
(f) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over
a period not to exceed five (5) years. However, loans used
to acquire any dwelling unit which, within a reasonable
time, is to be used (determined at the time the loan is
made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of
time that may exceed five (5) years. Notwithstanding the
foregoing, loans made prior to January 1, 1987 which are
used to acquire, construct, reconstruct or substantially
rehabilitate any dwelling unit which, within a reasonable
period of time is to be used (determined at the time the
loan is made) as a principal residence of the Participant or
a member of his family (within the meaning of Code Section
267(c)(4)) may provide for periodic repayment over a
reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may
provide for periodic payments which are made less frequently
than quarterly and which do not necessarily result in level
amortization.
(g) An assignment or pledge of any portion of a
Participant's interest in the Plan and a loan, pledge, or
assignment with respect to any insurance Contract purchased
under the Plan, shall be treated as a loan under this
Section.
(h) Any loan made pursuant to this Section after
August 18, 1985 where the Vested interest of the Participant
is used to secure such loan shall require the written
consent of the Participant's spouse in a manner consistent
with Section 6.5(a) provided the spousal consent
requirements of such Section apply to the Plan. Such
written consent must be obtained within the 90-day period
prior to the date the loan is made. Any security interest
held by the Plan by reason of an outstanding loan to the
Participant shall be taken into account in determining the
amount of the death benefit or Pre-Retirement Survivor
Annuity. However, no spousal consent shall be required
under this paragraph if the total accrued benefit subject to
the security is not in excess of $3,500.
(i) With regard to any loans granted or renewed on or
after the last day of the first Plan Year beginning after
December 31, 1988, a Participant loan program shall be
established which must include, but need not be limited to,
the following:
(1) the identity of the person or positions authorized
to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and amounts of
loans offered, including what constitutes a hardship or
financial need if selected in the Adoption Agreement;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps that
will be taken to preserve plan assets.
Such Participant loan program shall be contained in a
separate written document which, when properly executed, is
hereby incorporated by reference and made a part of this
plan. Furthermore, such Participant loan program may be
modified or amended in writing from time to time without the
necessity of amending this Section of the Plan.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall,
from time to time, in accordance with the terms of the Plan, make
payments out of the Trust Fund. The Trustee shall not be
responsible in any way for the application of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as
set forth in the Trustee's fee schedule (if the Trustee has such
a schedule) or as agreed upon in writing by the Employer and the
Trustee. An individual serving as Trustee who already receives
full-time pay from the Employer shall not receive compensation
from this Plan. In addition, the Trustee shall be reimbursed for
any reasonable expenses, including reasonable counsel fees
incurred by it as Trustee. Such compensation and expenses shall
be paid from the Trust Fund unless paid or advanced by the
Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or
in respect of, the Trust Fund or the income thereof, shall be
paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for
each Plan Year, the Trustee, or its agent, shall furnish to the
Employer and Administrator a written statement of account with
respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund
upon sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the
Trust Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith
upon its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the
Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such
statement of account within thirty (30) days after its
receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall
be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the
account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account
in a court of competent jurisdiction in which the Trustee,
the Employer and all persons having or claiming an interest
in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so
desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be
required by the Act and the regulations thereunder for any
Plan Year, the Administrator shall direct the Trustee to
engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of
the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the
Plan Year, furnish to the Administrator and the Trustee a
report of his audit setting forth his opinion as to whether
any statements, schedules or lists, that are required by Act
Section 103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity
with generally accepted accounting principles applied
consistently.
(b) All auditing and accounting fees shall be an
expense of and may, at the election of the Administrator, be
paid from the Trust Fund.
(c) If some or all of the information necessary to
enable the Administrator to comply with Act Section 103 is
maintained by a bank, insurance company, or similar
institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one
hundred twenty (120) days after the end of the Plan Year or
such other date as may be prescribed under regulations of
the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering
to the Employer, at least thirty (30) days before its
effective date, a written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at
his last known address, at least thirty (30) days before its
effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or
removal of any Trustee, a successor may be appointed by the
Employer; and such successor, upon accepting such
appointment in writing and delivering same to the Employer,
shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named
as a Trustee herein. Until such a successor is appointed,
the remaining Trustee or Trustees shall have full authority
to act under the terms of the Plan.
(d) The Employer may designate one or more successors
prior to the death, resignation, incapacity, or removal of a
Trustee. In the event a successor is so designated by the
Employer and accepts such designation, the successor shall,
without further act, become vested with all the estate,
rights, powers, discretions, and duties of his predecessor
with the like effect as if he were originally named as
Trustee herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as
such, he shall furnish to the Employer and Administrator a
written statement of account with respect to the portion of
the Plan Year during which he served as Trustee. This
statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under
Section 7.7 or (ii) set forth in a special statement. Any
such special statement of account should be rendered to the
Employer no later than the due date of the annual statement
of account for the Plan Year. The procedures set forth in
Section 7.7 for the approval by the Employer of annual
statements of account shall apply to any special statement
of account rendered hereunder and approval by the Employer
of any such special statement in the manner provided in
Section 7.7 shall have the same effect upon the statement as
the Employer's approval of an annual statement of account.
No successor to the Trustee shall have any duty or
responsibility to investigate the acts or transactions of
any predecessor who has rendered all statements of account
required by Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer
the Vested interest, if any, of such Participant in his account
to another trust forming part of a pension, profit sharing, or
stock bonus plan maintained by such Participant's new employer
and represented by said employer in writing as meeting the
requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the
Trustee against any and all claims, losses, damages, expenses and
liabilities the Trustee may incur in the exercise and performance
of the Trustee's powers and duties hereunder, unless the same are
determined to be due to gross negligence or willful misconduct.
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold
"qualifying Employer securities" and "qualifying Employer real
property," as those terms are defined in the Act. However, no
more than 100%, in the case of a Profit Sharing Plan or 401(k)
Plan or 10%, in the case of a Money Purchase Plan of the fair
market value of all the assets in the Trust Fund may be invested
in "qualifying Employer securities" and "qualifying Employer real
property".
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend this Plan subject to the limitations of this Section.
However, any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may only
be made with the Trustee's and Administrator's written
consent. Any such amendment shall become effective as
provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the
amendment affects the duties of the Trustee hereunder.
(b) The Employer may (1) change the choice of options
in the Adoption Agreement, (2) add overriding language in
the Adoption Agreement when such language is necessary to
satisfy Code Sections 415 or 416 because of the required
aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the
Plan to be treated as an individually designed plan. An
Employer that amends the Plan for any other reason,
including a waiver of the minimum funding requirement under
Code Section 412(d), will no longer participate in this
Regional Prototype Plan and will be considered to have an
individually designed plan.
(c) The Employer expressly delegates authority to the
sponsoring organization of this Plan, the right to amend
this Plan by submitting a copy of the amendment to each
Employer who has adopted this Plan after first having
received a ruling or favorable determination from the
Internal Revenue Service that the Plan as amended qualifies
under Code Section 401(a) and the Act.
(d) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than
such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other
than for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(e) Except as permitted by Regulations (including
Regulation 1.411(d)-4), no Plan amendment or transaction
having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective if
it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section
411(d)(6) protected benefits" the result of which is a
further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as
of the later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code Section 411(d)(6)(A), early
retirement benefits and retirement-type subsidies, and
optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination all amounts credited to the
affected Participants' Combined Accounts shall become 100%
Vested and shall not thereafter be subject to forfeiture,
and all unallocated amounts shall be allocated to the
accounts of all Participants in accordance with the
provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets to
Participants in a manner which is consistent with and
satisfies the provisions of Section 6.5. Distributions to a
Participant shall be made in cash (or in property if
permitted in the Adoption Agreement) or through the purchase
of irrevocable nontransferable deferred commitments from the
Insurer. Except as permitted by Regulations, the
termination of the Plan shall not result in the reduction of
"Section 411(d)(6) protected benefits" as described in
Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan only if
the benefits which would be received by a Participant of this
Plan, in the event of a termination of the plan immediately after
such transfer, merger or consolidation, are at least equal to the
benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or
consolidation and such merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6)
protected benefits" as described in Section 8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder
by executing the Adoption Agreement in form satisfactory to
the Trustee, and it shall provide such additional
information as the Trustee may require. The consent of the
Trustee to act as such shall be signified by its execution
of the Adoption Agreement.
(b) Except as otherwise provided in this Plan, the
affiliation of the Employer and the participation of its
Participants shall be separate and apart from that of any
other employer and its participants hereunder.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract
between the Employer and any Participant or to be a consideration
or an inducement for the employment of any Participant or
Employee. Nothing contained in this Plan shall be deemed to give
any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the
Employer to discharge any Participant or Employee at any time
regardless of the effect which such discharge shall have upon him
as a Participant of this Plan.
9.3 ALIENATION
(a) Subject to the exceptions provided below, no
benefit which shall be payable to any person (including a
Participant or his Beneficiary) shall be subject in any
manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt
to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be void; and no such
benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of
any such person, nor shall it be subject to attachment or
legal process for or against such person, and the same shall
not be recognized except to such extent as may be required
by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, for any
reason, under any provision of this Plan. At the time a
distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount to be
distributed as shall equal such indebtedness shall be paid
to the Plan, to apply against or discharge such
indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by
the Administrator that such indebtedness is to be so paid in
whole or part from his Participant's Combined Account. If
the Participant or Beneficiary does not agree that the
indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a
review of the validity of the claim in accordance with
procedures provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p),
and those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations
order", a former spouse of a Participant shall be treated as
the spouse or surviving spouse for all purposes under the
Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced
according to the Act and the laws of the State or Commonwealth in
which the Employer's principal office is located, other than its
laws respecting choice of law, to the extent not pre-empted by
the Act.
9.5 GENDER AND NUMBER
Wherever any words are used herein in the masculine,
feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so
apply, and whenever any words are used herein in the singular or
plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which
the Trustee or the Administrator may be a party, and such claim,
suit, or proceeding is resolved in favor of the Trustee or
Administrator, they shall be entitled to be reimbursed from the
Trust Fund for any and all costs, attorney's fees, and other
expenses pertaining thereto incurred by them for which they shall
have become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or
by any other means, for any part of the corpus or income of
any Trust Fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes
other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make a
contribution under a mistake of fact pursuant to Section
403(c)(2)(A) of the Act, the Employer may demand repayment
of such contribution at any time within one (1) year
following the time of payment and the Trustees shall return
such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the contributions may
not be returned to the Employer but any losses attributable
thereto must reduce the amount so returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company,
unless exempted by the Act and regulations thereunder, shall be
bonded in an amount not less than 10% of the amount of the funds
such Fiduciary handles; provided, however, that the minimum bond
shall be $1,000 and the maximum bond, 5500,000. The amount of
funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or
class to be covered and their predecessors, if any, during the
preceding Plan Year, or if them is no preceding Plan Year, then
by the amount of the funds to be handled during the then current
year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary
alone or in connivance with others. The surety shall be a
corporate surety company (as such term is used in Act Section
412(a)(2)), and the bond shall be in a form approved by the
Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may,
at the election of the Administrator, be paid from the Trust Fund
or by the Employer.
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the Insurer to make
payments provided by any such Contract, or for the action of any
person which may delay payment or render a Contract null and void
or unenforceable in whole or in part.
9.10 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not
have any responsibility for the validity of this Plan or for the
tax or legal aspects of this Plan. The Insurer shall be
protected and held harmless in acting in accordance with any
written direction of the Trustee, and shall have no duty to see
to the application of any funds paid to the Trustee, nor be
required to question any actions directed by the Trustee.
Regardless of any provision of this Plan, the Insurer shall not
be required to take or permit any action or allow any benefit or
privilege contrary to the terms of any Contract which it issues
hereunder, or the rules of the Insurer.
9.11 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of
this Plan, shall, to the extent thereof, be in full satisfaction
of all claims hereunder against the Trustee and the Employer.
9.12 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is
permitted or required to do or perform any act or matter or
thing, it shall be done and performed by a person duly authorized
by its legally constituted authority.
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer,
(2) the Administrator, (3) the Trustee, and (4) any Investment
Manager appointed hereunder. The named Fiduciaries shall have
only those specific powers, duties, responsibilities, and
obligations as are specifically given them under the Plan. In
general, the Employer shall have the sole responsibility for
making the contributions provided for under Section 4.1; and
shall have the sole authority to appoint and remove the Trustee
and the Administrator; to formulate the Plan's "funding policy
and method"; and to amend the elective provisions of the Adoption
Agreement or terminate, in whole or in part, the Plan. The
Administrator shall have the sole responsibility for the
administration of the Plan, which responsibility is specifically
described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust,
except those assets, the management of which has been assigned to
an Investment Manager, who shall be solely responsible for the
management of the assets assigned to it, all as specifically
provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it
shall be in accordance with the provisions of the Plan,
authorizing or providing for such direction, information or
action. Furthermore, each named Fiduciary may rely upon any such
direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan
to inquire into the propriety of any such direction, information
or action. It is intended under the Plan that each named
Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under the Plan.
No named Fiduciary shall guarantee the Trust Fund in any manner
against investment loss or depreciation in asset value. Any
person or group may serve in more than one Fiduciary capacity.
9.14 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any
construction of the provisions hereof.
9.15 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
if, pursuant to a timely application filed by or in behalf
of the Plan, the Commissioner of Internal Revenue Service or
his delegate should determine that the Plan does not
initially qualify as a tax-exempt plan under Code Sections
401 and 501, and such determination is not contested, or if
contested, is finally upheld, then if the Plan is a new
plan, it shall be void ab initio and all amounts contributed
to the Plan, by the Employer, less expenses paid, shall be
returned within one year and the Plan shall terminate, and
the Trustee shall be discharged from all further
obligations. If the disqualification relates to an amended
plan, then the Plan shall operate as if it had not been
amended and restated.
(b) Except as specifically stated in the Plan, any
contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by
the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (1)
year following a final determination of the disallowance,
whether by agreement with the Internal Revenue Service or by
final decision of a court of competent jurisdiction, demand
repayment of such disallowed contribution and the Trustee
shall return such contribution within one (1) year following
the disallowance. Earnings of the Plan attributable to the
excess contribution may not be returned to the Employer, but
any losses attributable thereto must reduce the amount so
returned.
9.16 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner.
9.17 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section
6.10 and Section 6.11 only upon death, Total and Permanent
Disability, normal or early retirement, termination of
employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any Affiliated Employer may
adopt this Plan and all of the provisions hereof, and participate
herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such
Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to
select the same Adoption Agreement provisions as those
selected by the Employer other than the Plan Year, the
Fiscal Year, and such other items that must, by necessity,
vary among employers.
(b) Each such Participating Employer shall be required
to use the same Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all
contributions made by Participating Employers, as well as
all increments thereof.
(d) The transfer of any Participant from or to an
Employer participating in this Plan, whether he be an
Employee of the Employer or a Participating Employer, shall
not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Combined Account as
well as his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan,
shall continue to his credit.
(e) Any expenses of the Plan which are to be paid by
the Employer or borne by the Trust Fund shall be paid by
each Participating Employer in the same proportion that the
total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the
credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of
this Plan; provided, however, that with respect to all of its
relations with the Trustee and Administrator for the purpose of
this Plan, each Participating Employer shall be deemed to have
designated irrevocably the Employer as its agent. Unless the
context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer
as related to its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred
between Participating Employers, and in the event of any such
transfer, the Employee involved shall carry with him his
accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall
thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating Employer
from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during
each Plan Year shall be allocated among all Participants of all
Participating Employers in accordance with the provisions of this
Plan. On the basis of the information furnished by the
Administrator, the Trustee shall keep separate books and records
concerning the affairs of each Participating Employer hereunder
and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register
Contracts so as to evidence that a particular Participating
Employer is the interested Employer hereunder, but in the event
of an Employee transfer from one Participating Employer to
another, the employing Employer shall immediately notify the
Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when
there shall be a Participating Employer hereunder shall only be
by the written action of each and every Participating Employer
and with the consent of the Trustee where such consent is
necessary in accordance with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating
Employer shall be permitted to discontinue or revoke its
participation in the Plan at any time. At the time of any such
discontinuance or revocation, satisfactory evidence thereof and
of any applicable conditions imposed shall be delivered to the
Trustee. The Trustee shall thereafter transfer, deliver and
assign Contracts and other Trust Fund assets allocable to the
Participants of such Participating Employer to such new Trustee
as shall have been designated by such Participating Employer, in
the event that it has established a separate pension plan for its
Employees provided, however, that no such transfer shall be made
if the result is the elimination or reduction of any "Section
411(d)(6) protected benefits" in accordance with Section 8.1(e).
If no successor is designated, the Trustee shall retain such
assets for the Employees of said Participating Employer pursuant
to the provisions of Article VII hereof. In no such event shall
any part of the corpus or income of the Trust Fund as it relates
to such Participating Employer be used for or diverted for
purposes other than for the exclusive benefit of the Employees of
such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating
Employers and all Participants, to effectuate the purpose of this
Article.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in
part from making a contribution which it would otherwise have
made under the Plan by reason of having no current or accumulated
earnings or profits, or because such earnings or profits are less
than the contribution which it would otherwise have made, then,
pursuant to Code Section 404(a)(3)(B), so much of the
contribution which such Participating Employer was so prevented
from making may be made, for the benefit of the participating
employees of such Participating Employer, by other Participating
Employers who are members of the same affiliated group within the
meaning of Code Section 1504 to the extent of their current or
accumulated earnings or profits, except that such contribution by
each such other Participating Employer shall be limited to the
proportion of its total current and accumulated earnings or
profits remaining after adjustment for its contribution to the
Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated
earnings or profits of all the Participating Employers remaining
after adjustment for all contributions made to the Plan without
regard to this paragraph.
A Participating Employer on behalf of whose employees a
contribution is made under this paragraph shall not be required
to reimburse the contributing Participating Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary,
the provisions of this Article shall apply with respect to any
401(k) Profit Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the
Plan:
(a) The amount of the total salary reduction elections
of all Parti
Exhibit 5
File No.33411.1164
(804) 788-8402
November 14, 1997
The Board of Directors
Crestar Financial Corporation
919 E. Main Street
Richmond, Virginia 23219
Crestar Financial Corporation
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Crestar Financial
Corporation, a Virginia corporation (the "Company"), in
connection with the filing of a registration statement
under the Securities Act of 1933, as amended, with respect
to 25,000 shares of the Company's Common Stock (the
"Shares"), to be offered pursuant to the American National
Savings Bank, F.S.B. 401(k) Plan (the "Plan").
In rendering this opinion, we have relied upon,
among other things, our examination of the Plan and of such
records of the Company and certificates of its officers and
of public officials as we have deemed necessary. In
connection with the filing of such registration statement,
we are of the opinion that:
1. The Company is duly incorporated, validly
existing and in good standing under the laws of the
Commonwealth of Virginia; and
2. The Shares have been duly authorized and,
when issued in accordance with the terms of the Plan and
the applicable Agreements (as defined in the Plan), will be
legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion
with the Securities and Exchange Commission as an exhibit
to such registration statement.
Very truly yours,
/s/ Hunton & Williams
Hunton & Williams
Exhibit 23.3
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Crestar Financial Corporation on Form S-8 of our
report dated January 16, 1997 on Citizens Bancorp as of and for
the year ended December 31, 1996, which is incorporated by
reference in the Annual Report on Form 10-K of Crestar Financial
Corporation for the year ended December 31, 1996.
/s/ Deloitte & Touche LLP
Richmond, Virginia
November 14, 1997
